Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Edinburgh Royal Maternity and Simpson Memorial Hospital Order Confirmation Bill [Lords],

Rothesay Water Order Confirmation Bill [Lords],

Considered; to be read the Third time To-morrow.

Oral Answers to Questions — UNEMPLOYMENT.

BENEFIT AND ASSISTANCE.

Mr. A. Jenkins: asked the Minister of Labour whether, in view of the increase in the cost of living, he will at once take the necessary steps to provide an increase in the rates of unemployment benefit and also take similar action in respect of the rates of assistance as provided under the regulations of the Unemployment Assistance Board?

Mr. S. O. Davies: asked the Minister of Labour whether, in view of the serious and rapid increase in the cost of living, he will consider the advisability of increasing the scales of benefit and allowances for the unemployed and their dependants?

The Minister of Labour (Mr. Ernest Brown): I would refer the hon. Members to the reply I gave to the hon. Members for Doncaster (Mr. Short) and Greenock (Mr. Gibson) on 8th April, of which I am sending them copies.

Mr. Jenkins: Is there to be no increase in the rates of unemployment benefit or unemployment assistance, notwithstanding the fact that there is a substantial increase in the cost of living?

Mr. Brown: I do not consider that circumstances have arisen which justify it.

Mr. Jenkins: Does the Minister take the attitude on this question that there can be no increase in the rates of benefit, regardless of the increase in the cost of living, before the Unemployment Assistance Board presents a report at the end of this year?

Mr. Brown: I have not said that. If the hon. Member will refer to the replies to which I have referred him, he will find that the cost of living, as compared with 1924, is lower.

Mr. Short: Does the right hon. Gentleman propose to refer this matter to the Unemployment Assistance Board for consideration, having regard to the increase in the cost of living?

Mr. Brown: Not at the moment.

Sir Percy Harris: Will the right hon. Gentleman consider having an examination of all the figures and getting a report on the whole subject? Is he aware that there is very profound feeling in the country about the increase in the cost of living?

Mr. Brown: That is my normal duty.

Mr. Jenkins: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise this matter on the Adjournment at the earliest opportunity.

Mr. Jenkins: asked the Minister of Labour the number of applicants for unemployment assistance in each of the districts of the Unemployment Assistance Board in South Wales and Monmouthshire that will sustain a reduction as a consequence of the operation of the scales of assistance provided by the regulations; and the total weekly amount of the reductions?

Mr. Brown: The question of the adjustments to be made under the Regulations of 1936 has been remitted by the board for consideration by the local advisory committees concerned, and pending the result of their recommendations I am not in a position to give the desired information.

Mr. Jenkins: Can the Minister say at what date the Exchanges will be in a position to give that information?

Mr. Brown: That will depend entirely upon the course taken by the local advisory committees.

Mr. E. J. Williams: asked the Minister of Labour whether he is aware that men are sent by the Maesteg Employment Exchange in search of work outside the district at their own expense, and that no allowance is made by the Unemployment Assistance Board to meet this additional charge in assessing the means of destitute persons; and whether steps will be taken to rectify the matter?

Mr. Brown: I understand that the Maesteg Exchange submitted some men for definite vacancies notified at a colliery some 5½ miles away; 48 out of 71 were engaged, the others being regarded as unsuitable. The Unemployment Assistance Board tell me that they cannot make it a general practice to grant allowances to cover travelling expenses in such cases, and I am informed that in future the colliery management concerned will visit the Maesteg Exchange to interview applicants there.

Mr. Williams: Is it not a very pernicious principle that if a man is sent from the Employment Exchange by the authorities in search of work no allowance is made for any expenditure he may have to bear? Will the right hon. Gentleman reconsider this matter?

Mr. Brown: The hon. Member will realise that he is asking for the alteration of a very wide general principle. I have looked into this particular case and we have done our best to meet the difficulty by seeing that in future the management will attend at the Employment Exchange.

TRANSFERENCE.

Mr. Jenkins: asked the Minister of Labour whether he is aware that his Department issued an invitation to unemployed girls living in South Wales and other Special Areas to accept work in London at wages of 30s. per week for the first three months, thereafter at piecework rates enabling them to earn 35s. to 40s. per week, with approved lodgings at 15s. per week, and that neither undertaking given to the girls by his Department has been observed; and what immediate steps he proposes to take to ensure that information circulated by the Ministry as to terms and conditions of employment and lodgings for transferees will be observed?

Mr. E. Brown: The wages offered to the transferred women in this case were 30s.

a week for three weeks and thereafter piece-work rates at which competent workers could earn 35s. to 40s. a week. There was no breach of this offer except on one occasion when there was a stoppage owing to production difficulties and the wages clerk erroneously applied to these women the general practice of making a deduction for time lost; this mistake was rectified as soon as it became known but unfortunately some of the women made it a ground for leaving the employment. I may add that the firm continued the payment of the minimum of 30s. beyond the three weeks to women who were unable to earn as much or more at piece-work rates. The cost of lodgings was 18s. and, in most cases, this was the figure stated to the women but owing to a typing error it was in a few cases given as 15s.; I regret this error but understand that the women affected appreciated the position when it was explained to them. I have given these particulars at some length in order to show that there is no substantial ground for the highly coloured account of these cases which has been given in some quarters.

Mr. Jenkins: In view of that reply, will the Minister take greater care in future to see that the undertakings given by the Employment Exchanges in various areas are properly carried out?

Mr. Brown: We always take great care. The hon. Member will understand that errors will occur occasionally, and I was obliged to him for calling my attention to the Press cutting on this matter, as a result of which I had inquiries made. It is a pity that the women did not go direct to the exchange to make inquiries.

Mr. James Griffiths: What steps is the Minister taking to ascertain whether the wages stated can be reasonably earned on the piece rates prevailing?

Mr. Brown: That is a general issue of a much wider character.

Mr. T. Smith: asked the Minister of Labour the number of juveniles transferred from the Castleford Employment Exchange during the last six months?

Mr. Brown: Three boys under 18 years of age were transferred from Castleford under the Juvenile Transference Scheme during the six months endd 31st March, 1937. No girls were transferred during that period.

Mr. Smith: Is the Minister aware that there is growing dissatisfaction on the whole question of juvenile transference?

Mr. Brown: I do not think so. I think there is a very large body of public opinion in favour of our doing our very best to find work for these young people.

Mr. Smith: Is there not dissatisfaction among organised workers?

Mr. Brown: That is a matter of opinion.

Mr. Holdsworth: Is the right hon. Gentleman aware that the difficulty at that particular exchange is to get juvenile labour?

LIVERPOOL (STATISTICS).

Mr. Gibbins: asked the Minister of Labour the number of able-bodied unemployed in Liverpool not taken over by the Unemployment Assistance Board at the Appointed Day, and the number not accepted by the board since the Appointed Day?

Mr. E. Brown: In the Liverpool district of the board which includes Birkenhead, Bootle and Wallasey, 13,445 persons in receipt of public assistance prior to the Second Appointed Day have been taken over from the public assistance authorities; 3,199 such persons have been held to be outside the scope of the Unemployment Assistance Act, and there are 2,247 cases in which the question of scope is still under consideration. These figures show the position at 16th April, the latest date for which information is available.

Mr. Gibbins: Can the Minister say when these 3,000 will be decided upon?

Mr. Brown: 3,199 have been decided upon; 2,247 have not.

Mr. Gibbins: When will they be decided upon?

Mr. Brown: No doubt a good many have been decided upon since that date. The process is going on as rapidly as possible.

Mr. Gibbins: Who has responsibility for maintaining these people in the meantime?

Mr. Brown: If they are not transferred to the Board, it is the public assistance committee.

INSURANCE (FREE STATE CASUAL LABOUR).

Captain McEwen: asked the Minister of Labour whether he is aware that in the case of casual labour from the Irish Free State contributions to the National Health and Unemployment Insurance Funds are demanded from employers; and, seeing that in most cases the labourer does not remain in this country for as long as the statutory six months which would enable him to qualify for benefit, will he take steps to alter this position?

Mr. E. Brown: Under the general scheme of unemployment insurance joint contributions are payable in respect of all persons employed in insurable employment in Great Britain. Under the agricultural scheme persons not domiciled in and ordinarily resident outside the United Kingdom are excluded from unemployment insurance. Their employers are, however, required to pay employers' contributions in order to avoid a special inducement to employ such persons. In the case of health and pensions insurance, there is an arrangement whereby contributions paid in respect of employment in Great Britain count for benefit in the Irish Free State.

Mr. J. Griffiths: Will the right hon. Gentleman consider doubling the employers' contributions so as to put a bar upon the import of this labour from Ireland?

ASSISTANCE BOARD, WALES (AREA OFFICES, STAFF).

Mr. J. Griffiths: asked the Minister of Labour what is the number of the staff employed at each of the area offices of the Unemployment Assistance Board in Wales; what proportion of the members of the staff are able to speak Welsh; and whether, in making appointments to the staff, regard is had to the ability of the applicants to speak the Welsh language?

Mr. E. Brown: As the first two parts of the question involve a table of figures I will, if I may, circulate the answer in the OFFICIAL REPORT. As regards the last part of the question, I am informed by the Board that in the allocation of staff full regard is had to the necessity for the appointment of Welsh-speaking officers to those areas where a knowledge of the Welsh language is required.

Following is the Table:


Statement of staff* in Area Offices of the Unemployment Assistance Board in Wales Monmouthshire.


Area Office.
Total Staff.
Number of Welsh-speaking officers.


Cardiff District:


Aberdare
…
42
16


Barry
…
10
1


Cardiff (1)
…
30
6


Cardiff (2)
…
37
4


Dowlais
…
21
6


Ferndale
…
25
11


Merthyr
…
36
11


Pontypridd
…
34
11


Forth
…
25
7


Tonypandy
…
32
9


Treorchy
…
27
12


Newport District:





Abertillery
…
27
—


Bargoed
…
40
2


Brynmawr
…
25
—


Caerphilly
…
26
—


Ebbw Vale
…
27
3


Newport
…
34
3


Pontypool
…
39
3


Swansea District:





Ammanford
…
19
16


Bridgend
…
23
9


Cardigan
…
7
6


Gorseinon
…
5
2


Haverfordwest
…
13
3


Llanelly
…
25
20


Maesteg
…
22
9


Morriston
…
36
23


Neath
…
13
4


Pembroke Dock
…
7



Port Talbot
…
21
10


Swansea
…
36
3


Wrexham District:





Caernarvon
…
15
13


Holyhead
…
7
7


Mold
…
9
6


Newtown
…
12
8


Rhyl
…
17
10


Wrexham
…
26
15


* Excluding typists and messengers.

EXCHANGE, LIVERPOOL.

Mr. Gibbins: asked the Minister of Labour whether he is aware that men and w omen are herded together in a room far too small at the Employment Exchanges, Upper Parliament Street, Liverpool; that applicants are kept waiting five or six hours for assistance, and others after waiting all day receive no help at all; and whether he will take steps to improve these conditions?

Mr. E. Brown: The premises in question are offices of the Unemployment Assist-

ance Board. The board is aware that some congestion has occurred. The waiting-room space has only been seriously taxed on the last two Fridays when, following the Second Appointed Day, large numbers of persons applied for allowances in supplementation of benefit. Certain of these applicants were adjudged not to be in need, but I have no reason to suppose that any cases of hardship were not assisted. The need for improved accommodation to meet the expansion on the Second Appointed Day was fully realised in advance, and every effort was made to secure other offices within reason-able distance of the applicants' homes. New premises were, 'in fact, provisionally selected several weeks ago but proved to be defective. Search was immediately renewed and there is now a good prospect that new premises will be acquired shortly.

Mr. Gibbins: Is the right hon. Gentle-man aware that some of the men have been waiting a fortnight and have not yet been given any benefits, and have been chased between the Unemployment Assistance Board and the public assistance committee?

Mr. Brown: I am not aware of that. If the hon. Member will let me have the names, I will look into the matter.

Oral Answers to Questions — SCOTTISH BANKERS' ASSOCIATION.

Mr. Kennedy: asked the Minister of Labour whether he has further considered the communication from the Scottish Bankers' Association showing that the managements of the Scottish banks are intimidating their employés in such a manner as to prevent the men supporting their association in matters relating to their conditions of employment; and whether any steps can be taken to protect the rights of the employés?

Mr. Cassells: asked the Minister of Labour whether he has yet anything to report regarding the allegation of the Scottish Bankers' Association that members of the staffs in the Union and North Banks have been subjected to veiled intimidation by their employers in so far as the question of strike is concerned; and whether he is now prepared to set up a committee of inquiry to investigate the position?

Mr. E. Brown: The Scottish Bankers' Association are, I understand, sending me


further information which will receive my careful consideration.

Oral Answers to Questions — COLLIERY WASTE HEAPS.

Mr. Tinker: asked the Minister of Labour whether he is aware that many local authorities in mining areas have waste heaps and waterlogged ground caused through mining; and what assistance can be given if they desire to reclaim the land?

Mr. E. Brown: There are no funds available from which local authorities outside the Special Areas can be assisted to carry out schemes of this kind.

Mr. Tinker: Is it possible to get them included under the Commissioner for the Special Areas?

Mr. Brown: No, I do not think so.

Mr. George Griffiths: May we hope that Clause 5 will be wide enough for us to get this in?

Mr. Brown: I would not like to give an unconsidered answer on that matter. There are certain things a site company can do, but I do not wish to mislead the House.

Oral Answers to Questions — EIGHT HOURS' CONVENTION.

Mr. Day: asked the Minister of Labour what is the Government's decision with reference to the ratification in the near future of the Washington Eight Hours' Convention; and whether it is the intention to introduce a Bill on these lines?

Mr. E. Brown: I would refer the hon. Member to my reply on this subject given to the hon. Member for Wolverhampton, East (Mr. Mander) on 3oth July last.

Mr. Day: Can the Minister say how far international co-operation has improved the standard of labour throughout the world?

Mr. Brown: There has been no change since I gave the answer to which I have referred.

Oral Answers to Questions — POST-MORTEM EXAMINATIONS.

Mr. C. Wilson: asked the Secretary of State for the Home Department whether he can state for the last avail-

able year and for other than county boroughs the number of post-mortem examinations directed or requested by coroners; and in how many of these cases the examination took place in hospitals, in mortuary premises, and in other places, respectively?

The Secretary of State for the Home Department (Sir John Simon): Excluding the City of London, the County of London and county boroughs forming complete coroners' districts, the figure for 1936 was 10,274. I have no information which would enable me to answer the second part of the question.

Mr. Wilson: Is the right hon. Gentleman aware that on a recent occasion there was no fit place for a post-mortem examination, and that it was held on the village green?

Sir J. Simon: I do not know that.

Oral Answers to Questions — SCOTLAND YARD (ASSISTANCE TO GOVERNMENT DEPARTMENTS).

Miss Ward: asked the Home Secretary whether he will take steps to ensure that, where the assistance of Scotland Yard is sought by Government Departments, all vital information accumulated by Scotland Yard should be made available to the Department concerned?

Sir J. Simon: I am not aware of any case which would call for action such as my hon. Friend suggests. In the case which I understand she has in mind, the Department concerned, which is not the Home Office, is satisfied that the police gave it all the information they had.

Miss Ward: Is the right hon. Gentleman aware that in the case referred to the Admiralty officials were ringing up Scotland Yard practically every day, and that vital information was withheld by Scotland Yard? Will he reconsider the statement he has just made?

Sir J. Simon: Do I understand my hon. Friend to say that information was withheld by Scotland Yard?

Miss Ward: Information was withheld from the Admiralty by Scotland Yard when they telephoned in connection with the disappearance of a naval boy. Scotland Yard withheld information which was either in their possession or in the possession of the local police who were in communication with Scotland Yard.

Sir J. Simon: I was anxious to ascertain whether my hon. Friend has any complaint against my Department. I do not think she has any ground for complaint against my Department. The Admiralty are satisfied that the police gave them all the information they had.

Miss Ward: Is my right hon. Friend aware that I have a letter from the Admiralty stating that they were not in possession of all the facts? Otherwise my right hon. Friend knows that I would not have put down this question.

Sir J. Simon: If my hon. Friend will let me see the letter I shall be glad to deal with it. I think Scotland Yard gave all the information it had, but it cannot be held responsible if it does not know all the facts.

Oral Answers to Questions — BURGLARIES (LONDON AND HOME COUNTIES).

Commander Locker-Lampson: asked the Home Secretary how many burglaries have taken place in the Metropolitan police area since 1932, each year inclusive; and how many of these have resulted in the conviction of the criminals?

Sir J. Simon: Last week my hon. and gallant Friend asked for figures for London and the Home Counties. He now asks for figures for the Metropolitan Police District. Figures for the Metropolitan Police District, however, would be liable to be misleading because persons arrested for offences which were committed in the Metropolitan Police District may have been tried and convicted at courts outside that district, while offences committed outside that district may have been dealt with at the Central Criminal Court. I have, therefore, had a statement prepared giving the figures for which he asked last week, and, with his permission, I will circulate it in the OFFICIAL REPORT. It must be remembered that the difference between the number of crimes known to the police and the number of convictions obtained does not represent the volume of undetected crime, since a convicted prisoner frequently admits numerous other offences, and a single conviction may therefore dispose of a number of crimes.

Commander Locker-Lampson: Does not the reply indicate that it would serve

the public service to withdraw a great many policemen who are arresting motorists and to let them concentrate on finding burglars?

Sir J. Simon: I think my hon. and gallant Friend had better look at the figures, which are not very unsatisfactory.

Following is the statement:

Number of offences of burglary, housebreaking and breakings into shops, warehouses, etc., known by the police to have taken place in the Metropolitan Police District, the City of London, and the counties of Berkshire, Essex, Hertfordshire, Kent and Surrey, and the number of persons found guilty at courts in that area during each of the years 1931–35.

Offence and Year. (1)
Crimes known to police. (2)
Persons found guilty. (3)


Burglary:




1931
500
141


1932
854
179


1933
715
144


1934
604
168


1935
376
149


Housebreaking:


1931
5,215
335


1932
7,809
397


1933
6,969
330


1934
6,591
362


1935
5,708
409


Breaking into Shops, Warehouses, etc.:




1931
4,712
861


1932
7,213
1,008


1933
6,563
859


1934
5,708
1,045


1935
5,231
1,380

As pointed out in the last volume of Criminal Statistics about a third of the persons found guilty of "breaking and entering" are under the age of 14 and over half are under the age of 17.

Oral Answers to Questions — TRANSPORT.

ROAD SAFETY (SCHOOL CHILDREN).

Mr. Creech Jones: asked the Home Secretary whether he is aware that both in the Metropolitan area and elsewhere requests that police constables should assist children to cross busy roads near schools have been refused owing to lack


of man-power; and will he take steps to augment police forces so that police protection can be provided where necessary at school crossings at the time of assembly and departure where requests for such are made by educational authorities?

Sir J. Simon: Special police protection is given to children outside more than 1,300 schools in the Metropolitan Police District, and similar arrangements are made by county and borough police authorities so far as the available manpower will permit. Whether additional men should be specially provided for the purpose is a matter for the police authorities concerned, in consultation with chief officers of police: it may be that in particular cases they do not feel that they are justified in withdrawing a man from his primary duties or in incurring the substantial expense of increasing the force, having regard to the other measures which might be taken and which were recommended for the purpose by the Inter-Departmental Committee on Road Safety among school children.

MOTOR POLICE PATROLS.

Colonel Goodman: asked the Home Secretary whether it is the intention to adopt for the Metropolitan police area the graph system of recording the speed of police cars in place of the existing method of speedometer reading?

Sir J. Simon: No, Sir. The Commissioner of Police informs me that he does not regard the system as offering any material advantage over existing methods.

RAILWAY FARES (EDGWARE AND STANMORE).

Sir Reginald Blair: asked the Minister of Transport whether, in view of the overcrowding on the Edgware and Morden tube, he will make representations that the fares from Stanmore, Middlesex, be made to correspond with those from Edgware, and so assist to ease the existing congestion?

The Parliamentary Secretary to the Ministry of Transport (Captain Austin Hudson): I am assured that the board will take all practicable steps at the earliest opportunity to bring about greater uniformity between these fares and those charged on their Edgware line.

Mr. Kelly: Can we have something more definite than that statement? Is there the possibility of these fares being brought into line with those on the tubes, so that the disgraceful overcrowding which now takes place may be eased?

Captain Hudson: I think it follows from my answer that this matter is under active consideration, and therefore there is the possibility that that desirable state of affairs will be brought about.

Mr. Attlee: Is it not a fact that this is controlled by the main line railways, who prevent the bringing down of the local services because of the fares on their lines, which nobody uses?

Mr. Kelly: Is there any likelihood of an early settlement and decision being made known to us?

Captain Hudson: I will do my best to try to see that an early decision is come to.

Oral Answers to Questions — EXPLOSION, DARLINGTON.

Mr. Thorne: asked the Home Secretary whether he can give the House any information in connection with the explosion at the Darlington forge works; how many men were killed and how many were injured; and what was the cause of the explosion?

Sir J. Simon: This regrettable accident occurred on 17th April. The casting of the stern frame of a ship was proceeding and had been almost completed when an explosion occurred and a jet of molten metal was projected upwards, with the result, I am sorry to say, that two men were killed and six others injured. It has not yet, I understand, been possible to expose the casting, and the causes of the explosion are accordingly still unknown.

Oral Answers to Questions — DARTMOOR PRISON.

Mr. Thorne: asked the Home Secretary whether he can give the House any information in connection with the manner that prisoners at Dartmoor can convey any genuine complaint to the chief commissioner of the prison?

Sir J. Simon: The importance of securing to every prisoner full opportunity to put any complaint before the authorities is fully recognised. The Statutory Rules


provide that every request by a prisoner to see the governor, or a prison commissioner, or a member of the board of visitors, is to be reported to the governor without delay; and the governor is required to hear the applications of all prisoners who have requested to see him and to report to the commissioner or member of the board of visitors at his next visit any applications to see them. It is part of the regular duty of the commissioners, assistant commissioners and members of the board of visitors at every visit to interview prisoners who may ask to see them. Moreover every prisoner can petition the Secretary of State and then has additional opportunity to bring any complaint before the highest authority. I think, however, that the hon. Member may be referring to a simpler point, and I would add that if a prisoner wants to complain, for example, of his food when it is being served, he can complain to the officer in charge at the time, and if he still feels dissatisfied, he can ask to see the governor the next morning.

Mr. Short: Will the right hon. Gentleman consider, having regard to the informed and ill-informed criticism of the prison system, appointing a committee to go into the whole matter and report to this House?

Mr. Maclay: Does a prisoner require to give details of his complaint to junior officers before it is handed on?

Sir J. Simon: There are two systems that go side by side. There are cases in which the prisoner prefers to make his complaint direct to the governor or visitor, and he is entitled to do that. There are other cases where he wants to make a complaint straight away, and then he has to complain to the officer in charge. I have looked into this matter pretty closely, and while there may be room for remedy in any system, I do not think there is a great deal to complain about in this matter.

Mr. Short: Will the right hon. Gentleman appoint a committee to inquire into the matter?

Mr. Holdsworth: Does not the right hon. Gentleman think it advisable to set up such a committee in view of what I consider to be the wild statements made in a book written by Macartney, and would it not allay the sort of feeling that exists?

Sir J. Simon: I do not think I could give a decision on an important matter like that in answer to a supplementary question. I think that a candid statement of the facts as to the practice does a great deal of good.

Oral Answers to Questions — CINEMATOGRAPH SOUND FILMS (CENSORSHIP).

Mr. Day: asked the Home Secretary whether, in view of the continued widespread demand for the general improvement and standard of cinematograph sound films, he will consider the appointment of a committee to fully investigate the question of censorship of such films?

Sir J. Simon: The hon. Member I think has already had a reply from the Under-Secretary about this matter on 20th January.

Mr. Day: Will the right hon. Gentleman consider in new legislation making provision for an appeal from the Board of Film Censors to one authority?

Sir J. Simon: I did not know that the hon. Gentleman was suggesting legislation. Many things would have to be considered before legislation was undertaken.

Viscountess Astor: Does not my right hon. Friend think there could be a great improvement of the censorship of films, and does he not have constant protests from different bodies, particularly of women, saying that they think there ought to be a stricter censorship?

Sir J. Simon: A censorship is a very difficult question. The difficulty is that different people have different views.

Oral Answers to Questions — AIR RAID PRECAUTIONS.

Sir Robert Rankin: asked the Home Secretary whether he can now state what will be the total estimated cost of the air-raid precautions scheme; and whether any decision has been reached as to how this cost should be allocated as between local authorities and the Treasury?

Mr. Brooke: asked the Home Secretary whether he is aware that many municipalities are not proceeding with the schemes required by the Air Raid Precautions Department on account of the uncertainty in regard to the propertion of cost to be borne by the national Exchequer; whether he can now make a


statement as to the amount of charges which will be borne by the Government; and, if not, when is such information likely to be available?

The Under-Secretary of State for the Home Department (Mr. Geoffrey Lloyd): I am not at the moment in a position to add anything to the reply which I gave to a number of questions on this subject on 8th April.

Mr. Brooke: Can the hon. Gentleman say when he is likely to be in a position to make a statement?

Mr. Lloyd: My right hon. Friend promised on that occasion that he would make an early statement.

Captain Harold Balfour: Will the Home Office bear in mind the desirability of differentiating between areas on the vulnerable east coast where the cost per head is much greater and areas on the west coast where the cost per head is much less?

Oral Answers to Questions — CORPORAL PUNISHMENT (COMMITTEE OF INQUIRY).

Mr. Short: asked the Home Secretary whether he is aware that nine boys were ordered to be birched by justices in the West Riding juvenile court, Doncaster, on 7th April; whether the sentences have been carried out; and whether, seeing that a committee is being appointed to consider the question of birching, he proposes to advise magistrates and others not to order birching between now and the committee reporting?

Sir J. Simon: Yes, Sir, nine boys were ordered on 7th April to receive three strokes of the birch. Eight were birched on that day; a medical officer certified that the ninth was unfit for the punishment. As it must be widely known that I have decided to appoint a committee to consider the question, I do not think that further action on my part is required.

Mr. Short: Will the right hon. Gentleman go a little further than that and advise magistrates not to order such sentences, having regard to the fact that a committee of inquiry is being appointed?

Sir J. Simon: I do not think I can do that. The duty of the committee will

be to ascertain and to advise, and I am hurrying up the appointment of the committee in every possible way. In the meantime I am sure that benches of magistrates will realise that I regard this subject as one which needs investigation.

Mr. Leach: Has the right hon. Gentleman decided upon any of the members of the committee, and have any of them been birched?

Oral Answers to Questions — ARMLEY GAOL, LEEDS (DEATHS).

Mr. Lunn: asked the Home Secretary whether he will make a statement concerning the death of one man two days after admission to Armley Gaol, Leeds, as a debtor, and another, 19 years of age, who has committed suicide in the gaol during this month; and will he institute an inquiry into the circumstances?

Sir J. Simon: I have already made careful inquiry into both these cases. The first prisoner was a man of 43 who was received into Leeds prison on 2nd April. He was examined on admission by the medical officer and found to be suffering from valvular disease of the heart. In view of this it was arranged that he should be given no work requiring physical exertion. On the night of 3rd April he died—apparently in his sleep. The law requires that there shall be an inquest on every death in prison, and the jury found that death was due to natural causes. There is no suggestion that anything in his treatment in prison contributed to his death, and there is nothing the prison staff could have done to prevent or to render less likely this sudden heart failure.
The second case was that of a young man serving a sentence of three months in the second division. He was examined on his admission on 2nd April, and there was nothing wrong with him physically or mentally. His conduct while in prison was good: he gave no trouble and there was no question of any disciplinary treatment. On 12th April he was at work in the morning in association with other prisoners and there was nothing abnormal in his behaviour. At about 12.45 he was in his cell and was seen by the medical officer in the course of a routine round of the cells. He was then quite cheerful. At 1.15 the librarian officer who distributes books to prisoners visited his cell and the prisoner was then sitting read-


ing. At 1.40 he was found dead, having hanged himself from the window bars of his cell. In this case also there was an inquest. There was nothing the prison staff could have done to prevent this tragic occurrence and there is no suggestion that there was anything in the nature of harsh treatment which might have contributed to this impulsive suicide.

Mr. Lunn: Is the right hon. Gentleman aware that there is some uneasiness in the City of Leeds about these two tragic events and will the Home Office not call for some further inquiry into this matter, as well as other matters in connection with our prisons, so as to remove the possibility of such happenings as these?

Sir J. Simon: I am not at all surprised that people in Leeds or elsewhere should feel anxious about these incidents, and they are deeply distressing, I need not say, to the Home Office, but I have, in what I have said, given information quite impartially, and I hope very much that, with the hon. Member's help, that will allay public anxiety about these two cases.

Oral Answers to Questions — METROPOLITAN POLICE ORPHANAGE.

Mr. Short: asked the Home Secretary whether he can now make a statement respecting the future of the Metropolitan Police Orphanage, especially in reference to the report of the committee of inquiry?

Sir J. Simon: I am informed that the committee dealing with the affairs of the Orphanage made an interim report to the General Court on 30th March last and, subject to the Charity Commissioners establishing a scheme giving the necessary authority, the Orphanage will be sold. Provided that such a scheme is established it is hoped to be able to give a compassionate allowance of £36 a year to each child. This sum, however, will be liable to variation from time to time in accordance with the state of the funds.

Oral Answers to Questions — EDUCATION.

SCHOOL CANTEENS.

Viscountess Astor: asked the President of the Board of Education whether in view of the growing realisation of the importance of nutrition, and particularly of the fact that children who undergo

physical exercises should be properly fed, he will take measures to ensure that no new school, whether for juniors or seniors, is built without provision being made for a canteen?

The Minister of Education (Mr. Oliver Stanley): I have already drawn the attention of local authorities to the desirability of providing school canteens at schools where children come from a distance, and in the consideration of plans for new senior schools this point is always borne in mind. I am also prepared to consider any proposals by local authorities to make arrangements for school dinners in schools where children do not come from a distance, but I am not prepared to require the provision of canteens in all new senior and junior schools.

Viscountess Astor: Does not the right hon. Gentleman realise that drawing the attention of local authorities to this is not good enough? In view of this serious problem, does he not think that this would be the time to enforce this provision in the case of any new schools?

Mr. Stanley: In the case of new senior schools where children come from a distance, I do more than call the attention of the local authorities to the matter; but when it comes to a question of making this compulsory for all schools, whatever their size or situation, and whatever the distances from which the children come, I consider that is a matter in which the local authorities must have a say, although if they do in any case put up a proposal I shall consider it most sympathetically.

Mr. Jenkins: Does the Minister advise local authorities in all cases where children do come from a distance that a canteen should be provided?

Mr. Stanley: Yes, Sir; most strongly.

SCHOOLS (AVIATION, INSTRUCTION).

Mr. Leach: asked the President of the Board of Education whether he will draw the attention of local education authorities to the facilities which the Air Ministry have promised for tuition in aviation to scholars, with a view to helping air-minded pupils to become competent in civil aviation?

Mr. Stanley: I would willingly draw the attention of local education authorities


to the facilities referred to by my right hon. Friend the Under-Secretary of State for Air in the reply given to the hon. Member on 14th April. I understand however, that the amount of material available is very limited, and I should be reluctant to encourage authorities to make applications for material in excess of possible supply.

Mr. Leach: May we take it that the Minister is completely friendly to the motives set forward by the Under-Secretary of State for Air in connection with this matter?

Mr. Stanley: I should like to encourage this proposal to the fullest extent, but I do not wish to encourage such a demand from the local authorities as the Air Ministry would not be able to meet.

SIZE OF CLASSES.

Mr. Harvey: asked the President of the Board of Education whether, in view of the fact that over 2,000,000 children in England and Wales are still being taught in large classes of over 40, and that these include over 550,000 children in infants' classes, he will reconsider the possibility of making further efforts to reduce the size of these classes, especially wherever it can be done without large structural alterations?

Mr. Stanley: The number of classes of over 40 has decreased by more than 22 per cent. in the last three years, the total number of classes in the schools having fallen by 2 per cent. in the same period. Any further material acceleration of this continuing fall in the number of over-40 classes could only be secured by structural additions to schools, for which the present time is inappropriate owing to the large amount of building now in hand and the pending heavy decline in the school population.

Mr. Harvey: Is not the right hon. Gentleman aware of schools in which there are empty classrooms although in other schools under the same local authority there are overcrowded classrooms?

Mr. Stanley: That may very well be the case, but the empty classrooms may be 20 miles away from the others.

Sir P. Harris: Is the right hon. Gentleman aware that in adjacent schools there

are empty classrooms and overcrowded classrooms, and will he utilise some of the unemployed teachers who are eating out their hearts in idleness by reducing the size of some of these classes?

Mr. Stanley: In so far as it is a matter of the number of teachers available, when we are discussing programmes with the authorities, as we do every year, we bear in mind the possibility of reducing the size of classes.

Viscountess Astor: Will the right hon. Gentleman bear in mind that at very little expense he could get more accommodation for infant classes and increase the number of teachers, and does he not realise that it is absolutely impossible for any teacher to deal with classes of more than 40 children between 3 and 5 years of age?

Mr. Stanley: I certainly bear that in mind, but the noble Lady's idea of what constitutes a little expense is often different from my own.

Viscountess Astor: There is nothing more expensive than wasted lives.

Oral Answers to Questions — PUBLIC HEALTH.

MORTUARIES.

Mr. Wilson: asked the Minister of Health how many local authorities, other than those of county boroughs, have provided mortuaries, as empowered by Section 143 of the Public Health Act of 1875; and how many have not made any such provision?

The Minister of Health (Sir Kingsley Wood): I have no complete information on this subject, but since 1st April, 1920, loans have been sanctioned by my Department for the provision of mortuaries by 63 local authorities other than county boroughs.

WATER SUPPLY AND LAND DRAINAGE.

Mr. Chorlton: asked the Minister of Health whether any committee has been constituted to correlate the work of water supply with that of land drainage between his department and that of the Ministry of Agriculture?

Sir K. Wood: My hon. Friend will be aware that, with the concurrence of my right hon. Friend the Minister of Agriculculture and Fisheries, I have appointed a


Central Water Advisory Committee. I am sending my hon. Friend a copy of the constitution and terms of reference of this committee, which will, of course, be assisted by representatives of the Government Departments concerned. He will see that the question he raises is within those terms of reference.

MATERNAL MORTALITY.

Mrs. Tate: asked the Minister of Health when the report on the special investigations into maternal mortality made by his officers in various parts of the country will be available?

Sir K. Wood: I hope to lay this report before the House in the course of the next few days.

INFANTILE MORTALITY.

Mr. Thorne: asked the Minister of Health whether he can state the rate of infant mortality in the city of Letchworth; and if he can say what is the average infantile mortality for England, Wales and Scotland?

Sir K. Wood: For 1935, the last year for which separate figures are as yet available, the mortality rates of infants under one year of age per thousand live births were: Letchworth urban district, 17; England, 56; Wales (including Monmouth), 63. With regard to Scotland, the hon. Member should address an inquiry to my right hon. Friend the Secretary of State.

Mr. Thorne: Has the Minister any reasons why there is such a very low infantile mortality in Letchworth?

Sir K. Wood: Letchworth is a very small unit, the total births being about 200 or less each year. During the past five years, the infantile mortality rate has varied between 17 and 62 per 1000 live births.

Mr. J. Griffiths: Arising out of the Minister's first reply, will he cause a copy of the figures to be sent to the Unemployment Assistance Board?

Oral Answers to Questions — RENT RESTRICTIONS ACTS.

Mr. Tinker: asked the Minister of Health whether he is aware that Leigh Town Council have carried a resolution asking the Government to continue the

Rent and Mortgage Interest Restrictions Act until June, 1943; and will he say what consideration the Government will give to this request?

Sir K. Wood: I have received the resolution referred to by the hon. Member. As I have already announced, it is the Government's intention to set up forthwith a Departmental Committee to inquire into the operation of these Acts.

Oral Answers to Questions — GERMANY (REPARATION DEBTS).

Mr. Day: asked the Chancellor of the Exchequer whether he will give particulars of the present position in regard to all outstanding reparation payments, and the manner in which these payments have been suspended and/or modified?

The Chancellor of the Exchequer (Mr. Chamberlain): I would refer the hon. Member to the reply given to the hon. Member for the Plaistow Division (Mr. Thorne) on 25th January last, of which I am sending him a copy.

Mr. Day: Do the suspensions include cash or kind?

Mr. Chamberlain: I suggest that the hon. Member should study the answer to which I have referred him.

Oral Answers to Questions — PUBLIC ASSISTANCE (MINERS' PENSION SCHEME).

Mr. Smedley Crooke: asked the Minister of Health whether he is aware of the widespread anxiety that the miners' pension scheme, which was inaugurated to commemorate the Jubilee of King George V to provide pensions to raise the standard of living of persons who have been employed as miners in South Wales, has not been brought into action owing to the fear that the fund might be used to reduce allowances paid to families in need by the public assistance committees; and whether, in order that the large sum raised can be put to its proper use, he will give the assurance that the pensions will not be taken into account by the committees in assessing future applicants' needs?

Sir K. Wood: There is no statutory authority which would entitle public assistance authorities to disregard pensions awarded under this scheme.

Mr. T. Smith: Does the Minister not think there ought to be alterations in regard to this matter?

Mr. J. Griffiths: Will the Government give consideration to relaxing the conditions in this case, seeing that the pension scheme, if it comes into existence, will save £37,000 every year to the Government in unemployment benefits and allowances? In view of that fact, will the Government seriously reconsider the matter before giving a final answer?

Mr. Smedley Crooke: Would it not be wise to encourage voluntary effort in this matter?

Sir K. Wood: Yes, but there are many issues which arise. It will, of course, involve legislation.

Mr. G. Griffiths: Is the Minister not aware that the Yorkshire Miners' Association pensions have been taken into account all the time, a fact which has resulted in much hardship?

Oral Answers to Questions — LOCAL AUTHORITIES (CONTRACT TENDERS).

Sir Cooper Rawson: asked the Chancellor of the Exchequer what the procedure is with regard to supervision by the Treasury of the acceptance by local authorities of tenders for road or other public works; whether acceptance of the lowest tendered price is ever insisted upon by officials of the Treasury; and whether he concurs with the views expressed on behalf of the Minister of Health, in answer to a Parliamentary question on 28th July, 1936, that questions of efficiency and running cost, durability of materials and freedom from repair should be considered in addition to price?

Mr. Chamberlain: Responsibility for the administration of grants from public funds for schemes carried out by local authorities rests with the Department concerned under general conditions approved by the Treasury which vary according to the nature of the case. There is no insistence on acceptance of the lowest tender though, as was pointed out in the answer to which my hon. Friend refers, it is, other things being equal, a natural corollary of the system in use. I concur in the statement in that answer of the considerations which must be weighed and which may on occasion establish a case for passing over the lowest tender.

Mr. R. C. Morrison: Is the Minister aware that one of the difficulties of local authorities is that they are receiving a series of tenders of exactly the same figure?

Sir C. Rawson: asked the Minister of Transport whether he is aware that misconceptions continue to arise among local authorities as to the extent of their obligation to accept the lowest tendered price for public works; whether he will make it clear that durability of materials, non-skid qualities, and maintenance cost should be considered in regard to tenders for road works in addition to price; and whether his Department will give these considerations due weight also in approving contracts in connection with the trunk roads now under the control of the Ministry?

Captain Hudson: No, Sir, I am not aware that there is any general misconception of the position. When my right hon. Friend is asked to approve tenders other than the lowest, he is guided by the sort of considerations which my hon. Friend has mentioned as well as by the technical qualifications and financial standing of the contractors concerned.

Sir C. Rawson: Must we assume that, if the local authorities are not under any misconception, they have ignored the advice given by the Ministry of Transport?

Captain Hudson: We have issued a circular which sets out exactly what the position is, and I do not think they ought to be under any misconception.

Oral Answers to Questions — SUGGESTED WORLD CONFERENCE.

Mr. Arthur Henderson: asked the Prime Minister whether he is aware of the declaration of Herr Hitler that the German Government is willing to participate in a new world conference; and whether he will make a statement on behalf of His Majesty's Government?

The Prime Minister (Mr. Baldwin): Yes, Sir. His Majesty's Government have seen Herr Hitler's statement. The position of His Majesty's Government on this matter has been made clear from time to time, and I may, perhaps, repeat it. They would, of course, be willing to participate in a world conference provided that thorough and comprehensive investigation showed that such a confer-


ence would be likely to succeed and provided that there had been adequate preparation.

Mr. Henderson: Are the Government prepared to take action in order to implement the statement that the Prime Minister has just made by getting into touch with the German Government on this question?

The Prime Minister: I am not prepared at this moment to answer any supplementary question whatever.

Sir P. Harris: Will the Government take the initiative, if they are satisfied—

Mr. Speaker: Sir Cooper Rawson.

Oral Answers to Questions — UNITED STATES (BRITISH DEBT).

Mr. De la Bè: asked the Chancellor of the Exchequer whether he is prepared to consider endeavouring to effect an arrangement that Britain should settle her war debt to the United States of America on the basis of a 50-year loan, arranged in the United States, having due regard to Britain's capacity to pay?

Mr. Chamberlain: As stated in the Note addressed to the United States Government on 10th December, 1936, His Majesty's Government will be ready to re-open discussions on the settlement of the British War Debt whenever circumstances are such as to warrant the hope that a satisfactory result might be reached. I am not prepared to express any opinion at the present time in regard to methods of settlement.

Mr. De la Bè: Is not the right hon. Gentleman compelled to admit responsibility for what has been taking place in these negotiations during the last few weeks?

Captain Sir William Brass: Is not one of the great difficulties the fact that the United States will not accept imports from our country?

Mr. Bellenger: Will any settlement that takes place be comprehensive, including I he debts owed to this country?

Mr. Chamberlain: That is a hypothetical question.

Mr. Thorne: Will not the right hon. Gentleman say to other countries: "If the American Government are prepared to give Europe a clean slate, are you prepared to give us a clean slate?

Oral Answers to Questions — LAND DRAINAGE ACT, 1930.

Mr. de Rothschild: asked the Minister of Agriculture whether, in view of the fact that many internal drainage boards are unable to embark upon urgently necessary works of a capital nature owing to the impossibility of finding the necessary finance, and of the circumstances of the catchment boards, which prevent them from giving relief to the internal boards, either by a reduction of precept or by way of financial grants under Section 21 of the Land Drainage Act, 1930, he will consider amending that Act to enable him to make direct grants in appropriate cases in internal drainage boards towards expenditure on capital works such as are now made to catchment boards under Section 55 of the Act?

The Minister of Agriculture (Mr. W. S. Morrison): I would refer the hon. Member to the reply that I gave on 8th April to a question on this subject by my hon. Friend the Member for Lincoln (Mr. Liddall), to which I am not at present in a position to add.

Oral Answers to Questions — TRADE AND COMMERCE.

FILM INDUSTRY.

Mr. Hall-Caine: asked the President of the Board of Trade whether he is now in a position to state whether legislation will be introduced during the current Session of Parliament to protect the British film industry after the expiration of the existing Cinematograph Films Act?

The President of the Board of Trade (Mr. Runciman): The principal recommendation of Lord Moyne's Committee is that a quota of British films, which was imposed under the Cinematograph Films Act, 1927, on renters and exhibitors, should continue for a further period of 10 years. The Government accept this recommendation, and propose to introduce the necessary legislation before the end of the year, but further discussion with the trade interests concerned on some of the other recommendations of the Committee will be necessary before the legislation can be drafted.

Captain Arthur Evans: What percentage of the quota will apply in future?

Mr. Runciman: I cannot say at this stage.

SCRAP METAL (EXPORT).

Sir C. Rawson: asked the President of the Board of Trade whether his attention has been called to the export of scrap from, amongst other places, the port of Shoreham consigned to Hamburg and other places abroad; and whether, as this material may be required for the purpose of munitions, His Majesty's Government will consider prohibiting these exports?

Mr. Runciman: The British Iron and Steel Federation and the National Federation of Iron and Steel Scrap Merchants recently came to an agreement regarding the collection and distribution of scrap which is required by our steel industry. I understand that the scrap which has recently been exported from Shoreham was sold before this arrangement was made.

Mr. C. S. Taylor: Is it not a fact that large consignments of scrap iron and steel have been exported from every port along the South Coast during the last few months?

Mr. Runciman: A certain amount of export has been taking place, but a corresponding amount of import has also been taking place.

Oral Answers to Questions — SCOTLAND.

RIVER CLYDE (SAND DREDGING).

Mr. Maclay: asked the President of the Board of Trade whether he is aware that his Department prohibited two contractors from dredging sand from the bed of the River Clyde below low-water mark at the Pillar Bank for fear of injuring navigational interests, and that a third firm of contractors are still removing sand from an adjacent area of the river bed which is also Crown property; how many thousand tons of sand have been taken from the latter area of the river bed; what revenue by way of royalty his Department has received during the last 10 years in respect of the Crown's proprietary rights in each of the two areas; and whether, in view of the danger to navigational interests, he proposes to prohibit all removals of sand from the latter area?

Mr. Runciman: Between 1928 and 1935, two firms were allowed, under licences

and permits granted by the Board of Trade, to dredge materials from a portion of the Pillar Bank, which is under Crown ownership. Following representations from the local navigation authorities as to the effect of the dredging on navigable channels, the Board's consent to further removals was then refused, and the removals ceased. The third firm mentioned by my hon. Friend remove materials from an adjacent area which, they contend, is not Crown property, and I am not aware of the quantity of materials they have removed. No royalty has been received by the Crown in respect of that area, but the total amount received under the permissions granted in respect of the other area was about £2,600. With regard to the last part of the question, the possible effect of the removals on the interests of navigation is under the consideration of the Board of Trade and the local navigation authorities, and I am not in a position at present to state what action, if any, will be taken.

POULTRY INDUSTRY.

Lieut.-Colonel Moore: asked the Secretary of State for Scotland whether he is aware of the tendency among Scottish poultry breeders to reconsider the desirability of organising a marketing scheme for poultry breeders in Scotland; and whether, in the event of a scheme being evolved for Scotland, it will be possible to accord Scotland the benefits of protection under the Agricultural Marketing Acts?

The Under-Secretary of State for Scotland (Mr. Wedderburn): I understand that the Scottish National Poultry Council, among other bodies, have the question of egg marketing under consideration. As regards the latter part of the question, my hon. and gallant Friend will appreciate that, while I could not make any statement on a hypothetical question, it would be impracticable for the Government to take action necessarily affecting the whole of the United Kingdom following on the promotion of a scheme limited to Scotland.

HOUSING, ROSYTH AREA.

Mr. Watson: asked the Secretary of State for Scotland whether his attention has been drawn to the endeavour being made by Dunfermline Town Council to secure land for house building in the


Rosyth area; and, as a considerable part of the land available is under the control of the Scottish National Housing Company, whether he will see that a suitable arrangement is made so that the council may proceed with a housing scheme which is urgently required?

Mr. Wedderburn: I am aware that the Dunfermline Town Council are in touch with the Scottish National Housing Company about a portion of land at Rosyth. I understand that at this stage the inquiry is purely tentative, but that a reply will shortly be sent.

Oral Answers to Questions — NEWFOUNDLAND (MEDICAL AND HEALTH FACILITIES).

Mr. Brooke: asked the Secretary of State for Dominion Affairs whether any steps are being taken to remedy the lack of hospital facilities in Newfoundland which was shown in the report of the Department of Health and Welfare; and whether any measures are contemplated to combat the high rate of infant mortality and the prevalence of tuberculosis?

The Under-Secretary of State for Dominion Affairs (Marquess of Hartington): The measures now in progress for the improvement of the hospital facilities in Newfoundland, including the enlargement of certain hospitals at St. John's and the completion of a chain of cottage hospitals outside the capital, were summarised in Chapter IV of the Annual Report of the Commission of Government for 1936, Cmd. 5425. My right hon. Friend has recently received from the Governor detailed proposals for the extension of the tuberculosis sanatorium, and a special survey of tuberculosis conditions is in progress. Consideration is also being given to the establishment in outport districts of pre-natal clinics and child welfare services corresponding to those in operation at St. John's. I may add that special attention will be given to the improvement of medical and health facilities in the formulation of the long-term programme of economic reconstruction which is now under consideration.

Mr. Petherick: Is it not the case that a considerable number of additional medical officers have been appointed?

Oral Answers to Questions — DOMINIONS (PUBLIC RECORDS).

Colonel Goodman: asked the Secretary of State for Dominion Affairs what facilities are afforded to Dominion Governments to obtain copies of State papers and documents of historical interest in the custody of Government Departments in this country for their archives; and whether any consideration has been given to the question of transferring to the custody of the Dominion Governments the originals of any papers and documents of this nature?

Marquess of Hartington: As regards the first part of the question, Dominion Governments have in the past made considerable use of the facilities afforded them to obtain copies of documents in the Public Record Office that are of historical interest to them. Such facilities will continue to be given. As regards the second part of the question, rules have been made from time to time under the Public Records Office Acts relating to the transfer of original documents to oversea Governments. The latest of these, which is dated 15th January, 1936, and was approved by Order-in-Council on 25th May, 1936, gave the Master of the Rolls power to transfer documents not required to be preserved in the Public Record Office to the Government of, or a library in, any part of His Majesty's Dominions. Such documents have from time to time been transferred to various Dominions. It will be appreciated, however, that the number of documents falling in this category is limited. My hon. and gallant Friend will readily understand that in the eyes of historians the consideration of chief weight is that important historical documents should be kept together in the place where they can most readily be consulted by all concerned.

Sir Ronald Ross: Will my Noble Friend give the Irish Free State Government a copy of the Treaty, as they seem to have lost their copy?

Oral Answers to Questions — THE CORONATION.

Sir R. Blair: asked the Under-Secretary of State for Air whether he will consider giving the necessary travelling fares to all ranks not detailed for duty who desire to travel from camps to view the Coronation procession?

The Under-Secretary of State for Air (Sir Philip Sassoon): My hon. Friend's suggestion could not, as he doubtless realises, be considered in relation to the Royal Air Force alone, and I am afraid that it must be regarded as impracticable on grounds of expense.

Sir R. Blair: Could not my right hon. Friend make some exception for those of all ranks who are in camps in the very heart of the country?

Sir P. Sassoon: No, Sir. Of course, those airmen who can get leave to see the procession will benefit from the usual railway concession of half fares.

Oral Answers to Questions — GRESFORD COLLIERY.

Mr. David Grenfell: asked the Secretary for Mines whether and, if so, when, further exploration of the sealed-off area in the Gresford Colliery is to be commenced?

The Secretary for Mines (Captain Crookshank): The district which was involved in the explosion and in a subsequent extensive fire, has remained sealed-off by stoppings, and I am advised that the many measures which, by agreement, have been taken to stop leakages of air into the district, have not hitherto been sufficiently effective to remove the risk of fire breaking out again if the stoppings were opened and air freely admitted to the district, with danger to the lives of any exploring party. A further series of systematic tests by analysis of the atmosphere behind the stoppings is now being made, and the whole matter will be further considered as soon as the results are available. But in the meantime, and to clear up misunderstandings, I have given instructions that no exploration is to be undertaken without my approval, which I shall not be prepared to give until the general atmospheric conditions appear sufficiently safe. When these conditions obtain, a detailed scheme of precautions will have to be drawn up to guard against the dangers which at best must necessarily be incurred. Deeply as I regret the distress that delay may cause to the wives and families of many of those who lost their lives in the explosion, I have felt that they would not wish more

lives to be jeopardised. Moreover, I consider that I would be failing in my own duty if I were openly or tacitly to acquiesce in the taking of unwarranted risks.

Mr. Grenfell: Is the hon. and gallant Gentleman aware that for the last two years those on the workpeople's side who are most competent to judge believe that there is no risk to any persons who may desire to enter that part of the mine; and will he, before he makes up his mind finally not to have this part reopened, go into close consultation with the people representing the bereaved relatives on the spot? Does he not think that that would add to the confidence which is necessarily placed in the Department by these people, and which is an invaluable consideration in these matters?

Captain Crookshank: Confidence, of course, is valuable at all times, but in a matter of this kind I think that a systematic test by analysis of the atmosphere is even more important.

Mr. Grenfell: Is the hon. and gallant Gentleman aware that analyses have been made periodically for the last two years; that repeated analyses show no change at all in the atmospheric conditions; and that, in the opinion of those who have some knowledge of these subjects, the analysis does not indicate any danger in that part of the mine

Oral Answers to Questions — WAR OFFICE (ORGANISATION).

Mr. De la Bère: asked the Secretary of State for War whether, having regard to the increased demands made upon the War Office, he is satisfied that the present organisation is adequate for the work of his Department; and whether it is proposed to modify or increase the organisation of the War Office?

The Financial Secretary to the War Office (Sir Victor Warrender): Yes, Sir, I am satisfied that, with the changes introduced last year creating the Department of the Director-General of Munitions Production, the organisation of the War Office is adequate for its work. But the position is closely watched to ensure that, if changing circumstances require modification of the organisation or an increase of the staff employed, appropriate action can be taken.

Mr. De la Bère: Is it not a fact that all is not well with the War Office; and will my hon. Friend bear in mind that, while you may multiply the most modern machines, and adopt the most modern methods, the human element is, and will remain, the key to the situation?

Sir V. Warrender: For my hon. Friend's information, I can assure him that all is very well with the War Office.

Oral Answers to Questions — BRITISH ARMY.

BATMEN.

Mr. J. J. Davidson: asked the Secretary of State for War the total number of men employed as batmen or officers' servants in His Majesty's forces in Great Britain?

Sir V. Warrender: All officers and warrant officers Class I are entitled to a batman, but in some cases a cash allowance in lieu may be drawn. On 1st April, 1937, there were 6,762 officers and 1,038 warrant officers Class I, serving in Great Britain, but I regret that I am not in a position to state how many of these officers and warrant officers actually have a soldier batman.

Mr. Davidson: Is the hon. Baronet aware that many of these men who are serving as batmen and officers' servants have to work long continuous hours and have very little freedom? Further, does he not think we should have an improved type of officer if they cleaned their own equipment and quarters?

PROMOTION FROM RANKS.

Mr. Davidson: asked the Secretary of State for War the total number of rankers in the British Army promoted to commissioned rank in the years 1935 and 1936, respectively?

Sir V. Warrender: The figures are:— 1935, promotions to quartermaster 88, others 29, total 117; 1936, promotions to quartermaster 111 others 36; total, 147.

Mr. Davidson: Under the new regulations will there be more opportunities for rankers to obtain commissioned rank?

Sir V. Warrender: I do not know what the hon. Member means by new regulations.

Mr. Davidson: The regulations recently agreed to by the House which the Secretary of State said would bring about improvements in the Army.

ROUTE MARCHES, GLASGOW.

Mr. Davidson: asked the Secretary of State for War what steps are being taken to ensure the minimum of inconvenience to the general public during route marches of troops from Maryhill Barracks, Glasgow?

Sir V. Warrender: I am not aware of any complaints from the general public with regard to route marches of troops in Glasgow. On occasions when it seems likely that any inconvenience may result from the marching of troops through the streets, such as interference with traffic, the local police authorities are consulted.

Mr. Davidson: If I provide the hon. Baronet with some complaints from my constituents who have been hustled and pushed during these route marches, will he make inquiries?

Mr. Anstruther-Gray: Is my hon. Friend aware that, far from being an inconvenience, a large section of the public is only too pleased to have the opportunity of watching a good regiment march by?

Oral Answers to Questions — GREECE.

Mr. Mander: asked the Secretary of State for Foreign Affairs what reports he has recently received from the British Minister in Athens with regard to the situation in Greece under the dictatorship of General Metaxas and, in particular, the difficulty being experienced by British residents there to obtain foreign exchange in view of German penetration?

The Under-Secretary of State for Foreign Affairs (Viscount Cranborne): Reports which have recently been received from His Majesty's Minister at Athens indicate no abnormal developments in Greece. With regard to the second half of the question, it would not be possible within the limits of this answer to summarise the reports on the economic and financial situation in Greece which His Majesty's Government receive from His Majesty's Minister. As regards foreign exchange, the difficulties encountered generally by British interests in Greece resulting from the Greek transfer


restrictions are under constant review, and particular cases are dealt with as they arise. Fresh legislation for the protection of Greek currency was enacted by the Greek Government in August, 1936. His Majesty's Minister reported that in his view such legislation was necessary and did not involve any threat to British interests apart from certain special cases which have since been satisfactorily dealt with.

Mr. Mander: Will the Noble Lord make clear to the Greek Government that a continuance of the dictatorship there is likely to alienate British sympathy?

Oral Answers to Questions — BELGIUM.

Mr. Mander: asked the Secretary of State for Foreign Affairs whether the Belgian Government still adheres to the interpretation of Article 16 of the Covenant of the League of Nations in Annex F to the Treaty of Locarno; and whether he will give an assurance that in any changes contemplated in the status of Belgium her League obligations, as thus defined, will be in no way affected?

Viscount Cranborne: As regards the first part of the question, I would refer the hon. Member to the reply given to him on 15th March. As regards the second part, I would observe that, so long as Belgium is a member of the League, she remains bound by the obligations of the Covenant. Such obligations cannot be modified either by her own action or by any agreement that we may make with her.

Mr. Mander: Will this matter be dealt with by the Secretary of State in the statement that he proposes to make in the next few days?

Viscount Cranborne: I think it is dealt with quite clearly in my answer.

Oral Answers to Questions — SPAIN.

Mr. Mander: asked the Secretary of State for Foreign Affairs whether he has any statement to make with reference to the passage of 24 J.U. 82 Junker military aeroplanes over France from Germany to Spain during the night of. 18th–19th April; and whether the matter will be brought before the Non-Intervention Committee?

Viscount Cranborne: No, Sir.

Mr. Mander: Has the Noble Lord received any information on the subject from the French Government?

Viscount Cranborne: No, Sir.

Mr. Noel-Baker: asked the First Lord of the Admiralty what reports he has received from His Majesty's naval officers, giving the dates on which warships under the command of General Franco have been observed in Spanish territorial waters adjacent to Bilbao, and giving the names of these ships?

Major-General Sir Alfred Knox: Before answering this question will my right hon. Friend take into consideration the fact that a reply to the question might provide General Franco's enemies with valuable information?

The First Lord of the Admiralty (Sir Samuel Hoare): On 19th April I was informed that the commanding officers of the destroyers on the North Coast of Spain have frequently observed insurgent warships within the range of the Bilbao batteries. The batteries have never yet been seen by His Majesty's ships to fire. In addition to this information, on 9th April His Majesty's Ship "Beagle" observed the Spanish insurgent cruiser "Almirante Cervera" and armed merchant vessel "Galerna" firing at the battery at Muchichaco at ranges of between one and four miles. The battery did not reply.

Sir A. Knox: Does not that reply supply information to the Spanish Government?

Mr. Denville: Do not these questions interfere in the letter and the spirit with observance of the Non-Intervention Agreement?

Oral Answers to Questions — ROYAL NAVY (NEW CONSTRUCTION).

Colonel Gretton: asked the First Lord of the Admiralty whether the decision to commence work on the two dockyard-built "Dido" class cruisers of the 1936 programme at a later date than had been originally intended involves any slowing-up of the Admiralty's programme of new construction?

Sir S. Hoare: No, Sir. The effect of the decision is that the two cruisers of the "Dido" class in the 1937 pro-


gramme, to be built by contract, will be begun now, when it had originally been intended to begin the dockyard-built ships of the 1936 programme. The latter will be begun later in the year in place of the two 1937 ships. This transposition will not have any adverse effect on the progress of new construction, as the delay in one programme is counterbalanced by acceleration in the other.

BUSINESS OF THE HOUSE.

Mr. Attlee: I wish to ask the Prime Minister three questions on business—for what he proposes to suspend the Eleven o'clock Rule and how late it is intended to go; what is the business for next week; and, thirdly, whether he can give the date of the Recess?

The Prime Minister: I cannot answer the third question to-day. We are suspending the Rule to-night in order to take the Committee stage of the Special Areas (Amendment) Bill. I hope it will not be necessary to sit late. If no Amendment is made, there will be no Report stage and we shall be able to take the Third Reading on Monday. It is necessary to pass the Bill by the end of May, and we are anxious to get it to another place as early as possible because there will be a longish Recess at the Coronation. With regard to the business for next week—
On Monday, we shall further consider the Special Areas Bill and take other Orders if there is time.
Tuesday will be set apart for the Report stage of the Budget Resolutions.
Wednesday: The Report stage of the Livestock Industry Bill will be taken.
Thursday: The Committee stage of the Ministers of the Crown Bill.
Friday will be the last day this Session for the consideration of Private Members' Bills.
During the week progress will be made with other Government business as time and opportunity offer.

Mr. Attlee: May we take it that the Report stage of the Livestock Industry Bill is unlikely to be completed on Wednesday.

The Prime Minister: The Prime Minister indicated assent.

Mr. Attlee: May I also ask whether it will be possible fairly soon to give the date of the Whitsun Recess in view of the difficulty of hon. Members in making their arrangements during the Coronation period?

The Prime Minister: I hope to be in a position early next week to give the necessary information.

Mr. Batey: Are we to understand that, starting at it o'clock to-night, the Prime Minister proposes to finish the Committee stage of the Special Areas Bill? Will he keep in mind that up to the moment only Clause 1 has been dealt with, and that there are nine Clauses remaining to be considered and there are about a dozen Amendments? Is it fair to start the Bill to-night? Will he also keep in mind that we have had only one day for the Committee stage of the Bill, and that it is most unusual for an important Bill to be given only one day? Could we not have another day?

The Prime Minister: There are two points arising out of that question. It does not necessarily follow that the Bill will not be reached before 11 o'clock. We all hope that proceedings on the Budget Resolutions may finish at such a time that we may be able to start earlier. There was an understanding—perhaps the hon. Member was not in the House—that it might be possible that we might be able to take the remainder of the Committee stage without sitting unduly late. I say no more at the moment.

Mr. Batey: Would it not be better on the part of the Prime Minister, instead of making it so difficult for those of us who come from the Special Areas and who feel very strongly on this matter, and beginning the Debate after 11 o'clock, to give other facilities? For instance, would it not be better instead of adjourning the House for the whole of Coronation week to allow the House to sit on the Monday and Tuesday before the Coronation, and by so doing give us another day for the discussion of this Bill?

The Prime Minister: All that I can say in reply to the hon. Member is that I suppose he thinks that, whatever a Prime Minister may do, he can do something better.

Ordered,
That the Proceedings on the Special Areas (Amendment) Bill be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]

MESSAGE FROM THE LORDS.

That they have passed a Bill, intituled, "An Act to incorporate and confer powers on the East Anglesey Gas Company; to provide for the transfer to that company of the Gas Undertaking of the Mayor Aldermen and Burgesses of the Borough of Beaumaris for the amalgamation of the said Undertaking with the Undertaking of the Amlwch Gas Company, Limited, and for the vesting of the amalgamated Undertaking in the company; and for other purposes." [East Anglesey Gas Bill [Lords.]

Also a Bill, intituled, "An Act to vest in the Mayor Aldermen and Burgesses of the Borough of Newcastle-under-Lyme the properties and liabilities of the Trustees of the Newcastle-under-Lyme Marsh Lands; to confer further powers upon the said Mayor Aldermen and Burgesses with reference to their gas and electricity undertakings and to make further provision with regard to the health local government and improvement of the said borough; and for other purposes." [Newcastle-under-Lyme Corporation Bill [Lords.]

Also a Bill, intituled, "An Act to make provision for the removal of the Royal National Hospital for Rheumatic Diseases Bath to a new site in the city of Bath; to authorise the Mayor Aldermen and Citizens of the said city to execute street works and to empower the said Mayor Aldermen and Citizens to acquire lands for the said new site for the proposed street works and for other purposes; to make further provision as to the local government and improvement of the city and the finances of the Corporation thereof; and for other purposes." [Bath Corporation Bill [Lords.]

And also, a Bill, intituled, "An Act to authorise the extension and improvement of Billingsgate Market; to vary the financial powers of the Corporation; and for other purposes." [City of London (Various Powers) Bill [Lords.]

EAST ANGLESEY GAS BILL [Lords].

NEWCASTLE-UNDER-LYME CORPORATION BILL [Lords].

BATH CORPORATION BILL [Lords].

CITY OF LONDON (VARIOUS POWERS) BILL [Lords].

Read the First time; and referred to the Examiners of Petitions for Private Bills.

WADEBRIDGE RURAL DISTRICT COUNCIL BILL.

The CHAIRMAN OF WAYS AND MEANS, in pursuance of Standing Order 91, relating to Private Bills, informed the House that, in his opinion, the Wade-bridge Rural District Council Bill, though unopposed, ought to be treated as an opposed Bill.

PRIVATE BILL PROCEDURE (LOCAL LEGISLATION CLAUSES).

Report from the Select Committee, with Minutes of Evidence, brought up, and read;

Report to lie upon the Table, and to be printed.

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE A.

Colonel Gretton reported from the Committee of Selection; That they had added the following Twenty Members to Standing Committee A (in respect of the Exportation of Horses Bill): Mr. Ammon, Captain Balfour, Colonel Burton, Viscount Elmley, Mr. Ernest Evans, Mr. Gardner, Sir Robert Gower, Mr. Grimston, Mr. Haslam, Captain Heilgers, Mr. Lunn, Mr. Macquisten, Mr. Mitchell, Mr. W. S. Morrison, Mr. Orr-Ewing, Mr. Radford, Mr. Ramsbotham, Mr. Tinker, the Marquess of Titchiield, and Mr. Wilson.

Colonel Gretton further reported from the Committee; That they had added the following Twenty Members to Standing Committee A (in respect of the Cinematograph Films (Animals) Bill): Captain Balfour, Mr. Boyce, Mr. Denville, Viscount Elmley, Mr. Ernest Evans, Mr. Gardner, Sir Robert Gower, Mr. Haslam, Sir George Jones, Mr. Leech, Mr. Lloyd, Mr. Lunn, Mr. Mitchell, Mr. Palmer, Mr. Radford, Sir Cooper Rawson, Sir Frank Sanderson, Mr. Tinker, the Marquess of Titchfield, and Mr. Wilson.

STANDING COMMITTEE C.

Colonel Gretton further reported from the Committee; That they had discharged the following Member from Standing Committee C: Sir Malcolm Barclay-Harvey; and had appointed in substitution: Mr. McKie.

STANDING COMMITTEE D.

Colonel Gretton further reported from the Committee; That they had added the following Fifteen Members to Standing Committee D (in respect of the Public Records (Scotland) Bill [Lords]): The Lord Advocate, Lord Balniel, Mr. James Brown, Mr. Elliot, Mr. Foot, Mr. Garro Jones, Mr. Robert Gibson, Mr. Hannah, Mr. Johnston, Mr. Graham Kerr, Mr. Lovat-Fraser, Captain McEwen, Major Rayner, Lord Colum Crichton-Stuart, and Mr. James Stuart.

Reports to lie upon the Table.

Orders of the Day — WAYS AND MEANS.

Considered in Committee [Progress, 21st April.]

[Sir DENNIS HERBERT in the Chair.]

AMENDMENT OF LAW.

Question again proposed,
That it is expedient to amend the law relating to the National Debt, Customs and Inland Revenue (including Excise), and to make further provision in connection with finance."—[Mr. Chamberlain.]

3.55 p.m.

Mr. A. V. Alexander: In opening the second day's Debate on the question of the Budget, I should like to make two personal references. The first is that I am sure my hon. Friends would like me to say how much we appreciate the careful presentation of the case for this side of the Committee by my hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence), yesterday. He has always been of great service to us, and we very much appreciate his efforts. The second point is that we should like to congratulate the Financial Secretary to the Treasury upon one aspect of his initiation as Financial Secretary in a Budget Debate. He made a careful attempt to answer all the questions that were put to him, in a very courteous and very pleasant manner. I hope he will not imagine that during the subsequent discussions upon the Budget he will get away as easily all the time, as he did last night, simply by being quiet and having a very pleasant smile. I can assure him that that will not be the case, but from the purely Parliamentary point of view we wish him good luck.
I am sure that hon. Members in most parts of the Committee will agree that, difficult as the task of the Chancellor of the Exchequer was on Tuesday, the Budget which he produced, with one solitary exception, was really a very mundane affair. Apart from the new duty which, strangely enough, bears a title very much like the initials of the Chancellor of the Exchequer—I do not think the Tories will ever let him forget that — National Defence Contribution, there is nothing very substantial in the Budget upon which there can be any very long debate. But when one comes to con-

sider some of the things said in the debate yester1942day, and one remembers the circumstances in which the Chancellor of the Exchequer presented his Budget, which is his sixth successive Budget and is said to be his last, there is a great deal to be said.
The Financial Secretary to the Treasury, again with that disarming smile of his, said that it was difficult for anyone to belittle the financial achievements of his right hon. Friend. [An HON. MEMBER: "Hear, hear!"] I was expecting to hear a cheer from the hon. Member for Huddersfield (Mr. Mabane). I have been reading the speech which he made in the Committee last night. The hon. Member seemed to think that there was nothing but praise to be used about the Budget. He thought that all the credit is due, if there is any credit due, to this Government, to this Chancellor of the Exchequer and to the Government party for all the happenings of the last six years. He then went on to deliver a very virulent and, I suppose in his opinion, a weighty attack upon Labour. He charged Labour with having neglected its duty in 1931, and he also charged it with arrogating to itself a special position in politics as representing the working classes. We can easily answer comments of that kind by actual quotations from friends of the hon. Member for Huddersfield. When he talks about a party arrogating to itself a special position in politics, has he ever studied a book of the kind which I hold in my hand? I have had it for 25 years. It is in paper covers, and I never part with it. Let me take this expression from a former Tory Chancellor of the Exchequer, spoken in the days when he was a Liberal Minister:
The proud Tory faction think they are the only persons fit to serve the Crown. They regard government as their perquisite and political authority as a mere adjunct of their wealth and title. They cannot bear to see a Government in power representative of and resting on the working classes; a Government supported by the Nonconformists and the trade unions which cares nothing and less than nothing for the fashionable influences before which they have always bowed.
That is the comment of the right hon. Member for Epping (Mr. Churchill) on the Tory tradition in regard to the arrogation of power to itself. When the hon. Member for Huddersfield has been a bit longer in politics he will refrain from the sort of attack he made upon


Labour yesterday. I say this to him as one who perhaps has a little more inside knowledge about 1931 than he can ever have. If the hon. Member really knew the facts about 1931, or if he cared to study them, it would not be Labour that he would attack but the persons responsible for five years of Tory wantonness in finance from 1924 to 1929; he would be attacking the people in the Government to-day who themselves absolutely answer to the charge that the right hon. Member for Epping made years ago, that they were the party of trickery and of treachery.

Mr. Mabane: After that attack may I rely on the right hon. Gentleman, when his friends behind him again arrogate to themselves in future a monopoly of interest in the working classes, to turn round and contradict them?

Mr. Alexander: We have never attempted to arrogate to ourselves the sole right to anything. I can say this any way: I come from a working-class home. I have been at work since I was 13 years of age. I come from a home which suffered from the cruelties of Toryism all through my boyhood days, and if my hon. Friends on these benches come more from that class than do hon. Members opposite, they have a perfect right to say to the workers, "If you want to be well governed, as workers you should choose people from your own class." Another word about the charges that the hon. Member made in reference to 1931. Let the hon. Member look at the files of the "Daily Mail," not the "Daily Herald," of 1929, and read how they recorded for us how his right hon. Friend in April, 1929, left for us at the Treasury bare cupboards and empty shelves: Let him take the word of his well loved "Daily Mail," a Conservative newspaper. Then he will have a true perspective of the position.
The real Debate that ought to take place in this House this week is not upon the ordinary provisions of this Budget, because the Chancellor of the Exchequer, we understand, is shortly to make a trek, a very short one, from No. 11 to No. 10 Downing Street. Our object in this Debate should really be to take stock of the financial position as it is to be left by the right hon. Gentleman when he takes the position of First Lord of the

Treasury. When I begin to study that position I cannot for the life of me understand how it is that hon. Members opposite repeat over and over again, "What wonderful people there are in charge of the national finances." "How wonderful," they say. [HON. MEMBERS: "Hear, hear."] I see that that statement is cheered once more. All right; perhaps we will see whether the cheers are repeated later when I give some of the details.
What was the position in regard to Treasury finance when the Chancellor of the Exchequer took office? He took office a very few weeks after the fall of the Labour Government in 1931. When the Labour Government fell it was on a dispute as to how the Budget should be balanced. Not whether it should be balanced but how it should be balanced. In the bill presented to the Labour Cabinet they were asked to find additional money to balance the Budget. It was a total of about £170,000,000, and the largest part of the bill was for meeting external and internal debt. We were asked to continue the payments annually to the United States of America. We were also asked to provide annually the proper allocation to the Sinking Fund for the redemption of debt. We were willing to do it. The only question was as to how to raise the money. Some people wanted to raise the money from the unemployed and the poor in a way that we did not approve, and as we could not get consent to the Budget being balanced in any other way, the crisis occurred in the political situation. Let us examine the position now at the end of six years, from that point of view. What a story it is. The Financial Secretary to the Treasury last night quoted from "David Copper-field," and I hope he will not mind my repeating the quotation. He said:
Mr. Micawber conjured me to observe that if a man had twenty pounds a year for his income and spent nineteen pounds, nineteen shillings and sixpence, he would be happy, but that if he spent twenty pounds one, he would be miserable."—[OFFICIAL REPORT, 21st April, 1937; col. 1872. vol. 322.]
The hon. Gentleman was careful to add the rest of the quotation:
After which he borrowed a shilling of me for porter, and cheered up.
That is exactly what the present Government have done. They presented the bill to the Labour Government. Ever since


then they have been doing exactly the opposite of what they insisted that the Labour Government should do. The right hon. Gentleman the Chancellor of the Exchequer will leave the Treasury for the Prime Minister's residence, having produced six unbalanced Budgets on the basis of the bill that he and his friends insisted should be presented to the Labour Government. I have not forgotten that in the course of those discussions, when consultations were taking place with the other parties, the right hon. Gentleman and Sir Herbert Samuel looked at the first draft of the proposals and they said: "It is a courageous beginning, but it is not enough." Sir Herbert Samuel went on to say, arising out of that joint conference, that it was imperative there should be a further diminution of the payments to the unemployed. That was the situation in 1931. It was supported entirely by the right hon. Gentleman who was acting temporarily for the Prime Minister during his absence on the Continent. That was the position.
Let us look at the facts about the debt. The right hon. Gentleman the Chancellor of the Exchequer is going home to No. 10 after six years of the Chancellorship, after much hard work—I do not deny that—bringing his sheaves with him. But they will be sheaves of debt, debt incurred and piled up in every one of these six Budgets. The total dead weight debt in this country in March, 1931, was £7,413,308,000. According to the White Paper issued this week that debt has increased to £7,797,151,000, an increase of dead-weight debt up to this point, before we begin to talk about the new £400,000,000 of loan, of £383,000,000. Marvellous, orthodox finance! I know the Chancellor will reply, "But you do not take into account the fact that we have floated an Exchange Equalisation Fund." It is true that by borrowing—they borrowed it—they produced an Exchange Equalisation process, and that ever since it was started the House has never been given a balance sheet. We have to rest upon the plain and cold words of the Chancellor that the fund, which has been borrowed, is covered by assets. We do not know what assets; we do not know what block of currency or of bills or from what country they are at any time held. No one knows; we just have to take the word of the Chancellor that that £350,000,000 loan is covered by

assets in a fund called the Exchange Equalisation Fund.
But if you allow for that you have an actual increase in the dead-weight debt, beyond that, of £33,000,000 since 1931. And in what circumstances? In circumstances which ought to have meant, if the Chancellor had followed the same methods of finance that were thrust by him upon the Labour Government, not an increase in the dead-weight debt but a very substantial reduction. What are the facts? They are, first, that by the conversion of £2,000,000,000 of War Loan to a lower rate of interest—incidentally in the long run another form of capital levy not on all the rentiers but only on those who hold War Loan—you have a reduction of the annual charge in consequence of the service of the debt, by £30,000,000. Every penny ought to have gone, on the principles of sound finance, to the service of debt. The charge upon the Exchequer for war pensions has also decreased by £10,000,000. On top of that the Chancellor, in the first years after the crisis of 1931, extorted ruthless economies from the unemployed by cuts in their rates of allowance, and he continued the operation of the means test, reducing the charge thereby on the Exchequer, and in addition he has now coming in a net increase in receipts from Customs and Excise Duties of £85,000,000 a year.
In face of these facts, if the Chancellor had been a really good and sound and orthodox Chancellor he ought to be sure to-day of a reduction of hundreds of millions in the National Debt. Instead, we find what? We find him with a heavier dead-weight debt; we find him with a seriously increased provision for expenditure. As my hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) said yesterday, if you take the full charge, including the loan expenditure not put into the Budget, £943,000,000 this year, there is every prospect of a £1,000,000,000 Budget next year. In fact the story of the right hon. Gentleman's stewardship at the Treasury in regard to finance is this: In the years when he was making these reductions in current expenditure, instead of being frugal and really looking after the debt position, he has been using up the ordinary reserves of peace, and now he has nothing to fall back upon in meeting his preparations for war. I want to suggest that that has been the story more or


less of almost every Tory administration for a century. The result was that the opposite party of that time went to the country, often perhaps with their tongues in their cheeks, with the cry of "Peace, retrenchment and reform." Certainly, always after a Tory administration there is always need both of retrenchment and reform.
Here we have all the resources of peacetime dissipated by the Chancellor of the Exchequer, and I want my friends in the country and in the House to note this now—that if we are given, as I hope we shall be given, power at the next election, let them please remember the financial situation, not created by Labour but created by this Government, which will be the legacy that we shall have to take over.

Sir John Wardlaw-Milne: Can the right hon. Gentleman give us the increased expenditure on social services and let us know whether he considers it is finance which has been dissipated?

Mr. Alexander: The hon. Member has asked a rhetorical question which he can well answer himself from the White Paper; I am dealing with the general finances of the Treasury. There is no dispute on the question of expenditure on social services. Of course there should be expenditure on social services, but I am contending that sound financial methods should be followed to provide the necessary reserves for the stability of the Exchequer and that duty has not been observed by the Chancellor of the Exchequer. It is not as though he was without instruction in the matter. He had available the report of the Colwyn Committee on National Debt and Taxation. He was told by that committee of experts that the Government ought as soon as possible to proceed to raise the contribution to the Sinking Fund to £75,000,000 per annum, and that it was very advisable if it could be done to make it £100,000,000 per annum.
What sort of a contribution has the Chancellor of the Exchequer made in that direction? I think it is fair to compare his record in the last six Budgets with the six Budgets prior to his entry into the Treasury. If you take the six Budgets prior to the right hon. Gentleman's entry into the Treasury you will find that they

provided approximately £330,000,000 for the Sinking Fund for the redemption of debt. In his five Budgets up to the present one—I cannot give the final figures for the present Budget—the right hon. Gentleman, instead of providing about £280,000,000 has provided only £72,000,000, and he has again taken power to borrow to meet the statutory Sinking Fund. How much his policy reminds me of something which I read years ago in "Punch," written by Artemus Ward:
Let us all be happy and live within our means, even if we have to borrow the money to do it with.
That is exactly what might be said of the right hon. Gentleman. He has certainly not attempted to pay his debts. If you take the figures you will find that the right hon. Gentleman's average during his term of office is £14,000,000 per year to the Sinking Fund as compared with an average for the previous six Budgets of £55,000,000 per annum. I suggest that he will vacate the Treasury leaving behind him six Budgets which have been unbalanced in that respect to the extent of £41,000,000 per annum. In addition to that he has piled up arrears of contributions to the United States debt. I take the figure of last December, to which date the actual arrears which he leaves to some successor to negotiate are £157,000,000. On the basis of the bill which was presented with his approval and with his pressure to the Labour Government in 1931 he has shown a deficit of £41,000,000 per annum plus the accumulated arrears on the United States debt of £157,000,000.
Nor must hon. Members think that the manner in which the Government have treated the American debt is without consequence. I discussed the matter with a number of leading business men in New York last September, and whilst they were perfectly reasonable and did not expect us in the circumstances of the last few years to pay the whole of the commitments, nevertheless, they resented very much the cold and callous way in which the Chancellor of the Exchequer said "I am not paying it." He has not even discussed it and has made no overtures to try and restore good relations with regard to this commitment. Therefore, it is not much use for hon. Members opposite to talk about the great achievements of the Chancellor of the Exchequer


in finance, for not only has he been unsound in producing six unbalanced Budgets but he leaves to his successor at the Treasury, at a time of rising expenditure and in a time when we are preparing for war a larger total dead weight of debt and no special reserves to meet it.
Let us look at his record on taxation. We have just raised the Income Tax to 5s. in the £, a very high charge for peace time. I do not suppose that the Chancellor of the Exchequer is proud of it; probably he thinks it a very disagreeable necessity in relation to the armament programme to which he is committed. But, nevertheless, it is a heavy direct tax in time of peace and there is no suggestion of it being static or likely to decrease. On the other hand, there is every reason to suppose, unless there is a much higher yield from other forms of taxation, which I cannot see at the moment, that he will have to increase Income Tax again before the armament programme is completed. But that is not all. What about the transfer of much of the burden from the direct taxpayer to the indirect taxpayer. The figures I have given are really startling. In the year ended 31st March, 1931, we raised from Customs and Excise Duties £245,000,000, and we are estimating a yield in the year 1937–38 of £333,000,000, an increase of £88,000,000.
I want to point out that this additional £88,000,000, raised from indirect taxation, is the alternative of the Chancellor of the Exchequer to raising the money where it should be raised, that is from those who are best able to bear it. If this was a charge on the Income Tax payer it would mean an increase of is. 6d. in the £ on the Income Tax. Really a burden of is. 6d. in the £ on the Income Tax has been transferred from the rich and Income Tax paying classes to the consumers. There used to be an old fable among hon. Members who supported Protection and tariffs and duties on commodities, that really the consumer does not pay the tax. I am interested to find that the Chancellor of the Exchequer in his speech completely gave the show away. He made this statement when he was considering alternative forms of increasing his revenue:
I might, of course, increase indirect taxation, but the prices in the shops, which particularly affect wage-earners, the lower grades of clerical workers, and the smaller rentiers whose incomes are largely derived from fixed

interest-bearing securities—those prices already show a tendency to rise, and I did not want to do anything to push them any higrier."—[OFFICIAL REPORT, 20th April, 1937; col. 2615, Vol. 322.]
That, of course, is a complete admission that the taxes which the Chancellor of the Exchequer has been raising by Customs and Excise are paid by the poor. It is true that they are paid by all consumers, but he knows that four-fifths of them are paid by the workers. There is not much room for pride or for special credit in the Chancellor's record in that regard. The right hon. Member for Epping in his more regenerate days, speaking on the Peoples' Budget told us that it was his aim and his profound belief that the tendency of the nineteenth century was steadily to decrease the ratio of percentage of indirect taxation and gradually to arrive at a position raising all the revenue required from direct taxation was the goal to which the right hon. Gentleman was committed. Now, we are going absolutely in the other direction. In this year's estimates 38.6 per cent. of the whole revenue of the Budget and 40 per cent. of the total tax revenue will be paid by the poor. The question, therefore, whether the Chancellor of the Exchequer has been a sound Chancellor in relation to taxation can be answered in this way, that he has, as I have often said before in this House, performed the usual function of a Tory Minister, to look after his friends while in office, and in times of stress, when money is more difficult to raise than at other times, to relieve his friends as much as possible and place the largest possible share he can on the working classes.
Now I come to another point of criticism and that is the result of the Chancellor of the Exchequer's financial policy in relation to prices. The Financial Secretary said something about it last night and made some comparisons between the prices of to-day and those of seven and eight years ago. I want to say to him that it really will not do for the Government to answer charges about high prices to-day by a formula of that kind. If he is going to take that line perhaps he will also look up the record of the reductions in the wages of the workers, in so far as they are available from the Ministry of Labour's figures in the years 1931, 1932, and 1933. I have been looking them up this morning. It must be remembered that there are many


workers who do not come within the records of the Ministry but who also suffered by way of reduced wages. But if you take those classes of workers of whom there is a record you will find that they lost £895,000 per week, which must be set off against the fall in prices. In those three years, they probably lost from £50,000,000 to £60,000,000 per annum in wages.
The spontaneous outbursts which are occurring among sections of the workers in various parts of the country at the present time, in many instances not organised or engineered by their unions, indicate how severely they are feeling the effects of the cost of living to-day. The "Ministry of Labour Gazette" was quoted yesterday by my hon. Friend the Member for East Edinburgh and I have no doubt that he would be much calmer and more conservative in his criticisms on this point than I am. I am sure, however, he will not mind it if I say that useful as are the figures of the Ministry of Labour cost of living index, they are not adequate for the purpose of giving a true picture of the price situation at any time. They have in their limited survey found a rise of 10 points in food alone as between May last year and March this year, but the Committee will forgive me if I make a further reference to certain other figures which we now have and which I mentioned last week. Those are figures given by Mr. Ronald George in a paper read to the Royal Statistical Society in which he pointed out that in 1933 the cost of food for an adult, for a week, on the minimum scale laid down by the British Medical Association was 5s. 11d. and that that had increased, on the cost-of-living index figure for July, 1936, to 6s. 9d. I pointed out last week that, since July, 1936, the cost of living has so increased in the food items, that the same diet would last week have cost 7s. 3d.—an increase of 1s. 4d. on 1933.
In other words, those who, because of their poverty, have to live upon the kind of food scale laid down by the British Medical Association are having to pay £1 where they had only to pay 15s. 6d. in 1933. That is the real measure of the rise in prices to-day. There is no doubt in the minds of those who are concerned, day by day, with the wholesale business of buying food commodities that the

figures given by the Ministry are from six to eight weeks behind. The present tendency in the wholesale food market shows that, within a few weeks, retail prices are bound to rise substantially in comparison with the corresponding period of last year. I compare wholesale prices of April, 1937, with those of January, 1936. Take middle quality wheat, Manitoba No. 2. In January, 1936, it was 36s. 6d. a quarter and in April, 1937, it was 69s. 6d. Barley increased in the same period from 8s. 4d. to 10s.; oats from 5s. 10d. to 8s. 4d.; maize from 18s. 3d. to 29s. 6d.; flour from 27s. 9d. to 43s. 9d.; beef, per stone, from 3s. 6d. to 4s. 4d. and up to 5s.; mutton from 5s.-5s. 8d. to 6s. 4d. and 8s.; bacon from 85s. to 92s. and 96s.; butter from 97s. to 105s.; cheese from 625. to 68s.; cocoa from 38s. to 80s.; potatoes from 75. 6d. to 10s., and sugar from 18s. 9d. to 20S. 1½d.. When these wholesale prices come to be related in the course of the next few weeks to retail prices, you are bound to see a further substantial increase in the cost of living.
I agree at once that the Government and the Chancellor cannot be held responsible for the rise in world prices so far as that is affected by external factors. But I do say that prices are also considerably affected by the financial policy of the Government. My hon. Friend the Member for East Edinburgh warned them that to issue a loan, to seek to deal by any policy of inflation with the necessary expenditure-as they regard it-on armaments, would be bound to have a serious effect on the price level and injure the general position and the standard of life of the community. That cannot be confined to the price level of food commodities. I take actual figures from the Board of Trade Journal of 8th April, which show that the average wholesale commodity index price for March, 1937, stood at 107.3 compared with 91.7 in March, 1936, or an increase in 12 months of 15.6 points. May I give one or two special examples? Coal increased 12.1 per cent.; iron and steel 10.7; nonferrous metals—required for armaments —55 per cent.; cotton 27.2 per cent.; wool 25·9 per cent.; other textiles 6.2 per cent.; chemicals and oils 8.3 per cent., and miscellaneous 22.6 per cent. Of course, with rising commodity figures we are faced, not only with a threat to the workers' standard of life but with even


greater charges to be met next year in the Government's general expenditure and in the case of the armaments programme. I can see no great check upon that as a result of the financial measures proposed by the Chancellor of the Exchequer.
May I refer to the effect of the Chancellor's policy upon another factor which was used against the Labour Government in 1931? It was said then that we had no policy for dealing with the growing danger of the adverse balance of trade. Let us see how the Chancellor's policy has affected that. If we take the figures for 1936 we find, first, an enormous increase on the year, in the adverse balance of trade—the total being something between £350,000,000 and £360,000,000. What is more serious is that when account is taken of all the credit to be got from invisible exports by insurance, shipping receipts and investments there is actually a deficit, on the balance of payments, on our external trade last year, of £19,000,000. Is that position improving with the Chancellor's policy? I think I can show that it is deteriorating. The figures of imports and exports for the first three months of this year, compared with corresponding periods of the last two years, show that in 1935, for the first three months, imports were £59,000,000 in excess of exports. In 1936 the corresponding figure was £78,000,000 and in 1937 it was 190,000,000, so that the adverse balance of trade, in this three months period, has enlarged since 1935, by £30,000,000. If we continue on that basis during the whole of the year, which I hope may not happen, we shall see an increase in the visible adverse balance of something like £120,000,000 and in all probability we shall have a deficit in the balance of payments, not of £19,000,000 hut of something nearer £100,000,000. It will be interesting to see the effect upon foreign opinion in financial circles and upon the foreign exchanges.
The Committee will now permit me to say a few words next with regard to the main new proposal in the Budget. I must not be unfair to the right hon. Gentleman and there are some proposals in the Budget which we welcome. There are one or two proposals for the purpose of checking evasion and the right hon. Gentleman can rest assured that, however much we may oppose him on other

matters, we shall support him always in his efforts to deal with persons who seek to evade their proper responsibilities to the State. But I want to deal with the National Defence Contribution. The position is that the right hon. Gentleman, after a great deal of pressure from this side, with regard to the steeply rising prices of materials required for armaments and the accumulated evidence of increasing profits, has ushered in this new proposal in an attempt to deal with that situation. I heard one or two comments from the other side on Budget Day which seemed to indicate that hon. Members thought that my hon. Friends on this side would strongly welcome this proposal. Many of my hon. Friends would welcome effective steps by the Chancellor to stop profiteering in armaments but until we get a great deal more information about these proposals, we can have no confidence that they are going to check profiteering in armaments.
I should say from experience of other Measures—not of exactly the same kind, but based on the same principle like the Excess Profits Duty—that a check on profiteering is just the opposite to what will be secured by this new tax. I agree with the criticism made by my hon. Friend the Member for East Edinburgh and by the right hon. Gentleman the Member for Hillhead (Sir R. Home). I think it is a false conception of the way to deal with profiteering, to allow the profiteer to charge the prices and make the profit first, and then to put a tax upon some of the profits. That is not the way to deal with it. If we are to judge by some of our experiences during the War and in the immediate post-war period, it would be fair to say that a method devised on those lines, so far from placing any incubus on the profiteer as such, will merely result in a new kind of impost on the general consumer. The profiteer will first charge the prices and the consumer will pay them. Then when the gross profit has been ascertained by the profiteer, he will look around in every nook and corner for some method of expenditure by which he can escape, before the net assessment is made, from his liability to the new duty.
I have a case in mind of a factory built by a great firm who were contractors during the War for food supplied to the troops in France. That factory cost about


£200,000 to build and equip and it was built in order that the firm might escape from Excess Profits Duty. The building stood idle for 12 years after the War—an idle factory and idle plant, with idle men all round the country. There was a complete waste of all that capital and labour for all that time, and, finally, that factory was bought for less than one-quarter of its cost. That is the kind of thing which this method of dealing with the problem is likely to induce. The Financial Secretary last night said that this would be different, because Excess Profits Duty had gone up to as much as 80 per cent—and certainly in later times it did reach that figure—and we are not now making any such impost as that. But I am not sure that that is a virtue of the scheme. If you are first going to allow the profiteer to make excess profits and then, instead of collecting 80 per cent., you are only going to collect one-fifth or one-fourth or in any case not more than one-third, the profiteer gets away with at least two-thirds of the swag. In regard to large businesses with large turnovers, even in respect of the one-third, there will be a great temptation to evasion and a great part of the return which ought to accrue to the Treasury may be dissipated in actual operations and spendings which can he charged against the gross profit before it comes to assessment of duty.
I hope that before the right hon. Gentleman puts this into the Finance Bill and makes it a permanent part of the financial policy for the year, he will reconsider the question from that angle. I hope that he will also give us to-night in more detail some of the information which was asked for in the course of yesterday's Debate. Certainly we had a little information on the matter from the Financial Secretary last night. It was interesting to know the general basis—although we have not yet had the details —upon which capital is to be computed. It was interesting to know that the duty is to be charged first, before assessment for Income Tax and that the amount paid in duty will be regarded as an expense and therefore deducted from the sum assessible for Income Tax. But I hope we shall hear, for example, what it is proposed to do in the case of mutual concerns and Industrial and Provident societies in regard to the computation of their capital. I can follow what the Financial

Secretary said about the proposed method of dealing with company securities, with preference and ordinary shares, and debentures, but what about institutions in which there is a capital which fluctuates every day, a capital which is obtained and used on the basis of continuous lending? I think it would be helpful if the right hon. Gentleman could give us some information on those points to-night.
I apologise to the Committee for having detained them so long and I only say this in conclusion. Perhaps I may be found numbered with the old statesman who said that he never really brought himself to forgive his political enemies but he did his best to see that they were put in a position in which, at least, he could sympathise with them. I think that on the whole, after six years of budgeting at the Treasury, the right hon. Gentleman's record of unsound finance and unbalanced budgets, of "scooping the pool" and leaving nothing for his successor, is one of which he can hardly be proud and that the best thing that we can do is to sympathise with him.

4.50 p.m.

Mr. Clement Davies: Everybody has been congratulating the Chancellor of the Exchequer upon the lucidity and clarity of his Budget statement. I join in congratulating him in that respect, but I should like first to congratulate the country upon its wonderful resilience, the wonderful way in which it has shown its power of recovery and of extracting itself from any Slough of Despond, however deep. I would like to congratulate the country also upon the power it has shown of recovering its trade activity, whatever fetters may be placed upon it. One can congratulate the Chancellor of the Exchequer upon the expansion of the revenue, but I cannot congratulate the right hon. Gentleman upon the last part of his Budget statement or upon the methods there proposed. Ever since 1909, when the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) introduced into his Budget matters which were really extraneous to the actual finance of the year, that precedent has been followed, and in my opinion it has been followed with disastrous results. One knows the reasons which induced the right hon. Gentleman the Member for Carnarvon Boroughs, at that time, to attach to his Budget matters


by which he hoped to get social legislation, which was being denied to him by another place up to that time. But why has the Chancellor of the Exchequer attached to this Budget something which is entirely unnecessary for the purposes of the present financial year?
Can anyone deny that the right hon. Gentleman had, before he came to that later part of his statement, already balanced his Budget? He had to meet an expenditure of £862,000,000, and he estimated a revenue of £847,000,000. The estimated deficit was £14,800,000, which was nearly met by the extra threepence on the Income Tax calculated to raise £13,000,000 in the present year. That left a deficit of £1,700,000, a sum which he rightly described as trifling. I suggest that he had in fact at that point balanced his Budget because it is impossible to estimate within £1,500,000 or £1,750,000, over or under, when you have to provide a total of £868,000,000. I wish Chancellors of the Exchequer of to-day and of the future would read the Budget statements of the greatest Chancellor of all time, namely Gladstone. If they would follow that purist, they would not fall into the traps into which so many Chancellors have fallen since.
The Chancellor on Tuesday rightly said that everybody would admit that the Government had played a part in restoring prosperity to the country, but if Governments are entitled to take credit for that, they must also take the blame for bringing about conditions which make trade conditions bad or perhaps almost impossible. It is, as I say, amazing how this old country will recover in spite of difficulties which are very often imposed on it by Governments, but the Governments must take the responsibility. The right hon. Gentleman the Member for Hillsborough (Mr. Alexander) was right in what he said about the slump in 1931. To a very large extent it was due to the inaccuracies in high finance of the right hon. Gentleman the Member for Epping (Mr. Churchill) when he was Chancellor between 1926 and 1929. It is not necessary for Chancellors of the Exchequer to go in for new methods of taxation. I agreed with the Chancellor of the Exchequer when he said that he rejected an increase in indirect taxation. I do not believe in indirect taxation. I suppose I am too much of a purist or a revolutionary ever to hope that such a

method as the single tax will come about, but the single tax is the fair tax. The only fair tax levied to-day is the Income Tax, where every man is called upon to bear his fair share according to his ability. He can, and, of course, he should, cut down his expenditure to meet his income, after making his fair contribution towards the country.
Now I want to come to my real objection to the Chancellor of the Exchequer's new suggested tax. My first and fundamental objection to it is that it offends against the principles of taxation. It is a double tax; secondly, it is a double tax upon certain selected trades, companies and industries. Thirdly, it is not entirely upon all those selected trades, but only upon such of them as failed to make profits during the periods 1933–34–35. Those who were fortunate during the slump to make large profits will escape this extra tax. The Chancellor will say to those who were doing well during that time: "Continue to do well and I will not tax you a single penny more than the ordinary taxation, so long as you do not increase the profits which you have been making in the past." To the other people he is going to say: "You have gone without profits from 1931 until now; I will see to it that if you make any profits from now on there will be an extra tax upon your backs over and above the ordinary taxation which I put upon the backs of others. Dare to do better at your peril." That is the full nature of this new form of taxation.
I have said that it is a double tax. In 1931 Lord Snowden introduced, in his Budget, a complete travesty of the Land Valuation Sections of the Budget of the right hon. Gentleman the Member for Carnarvon Boroughs. Lord Snowden did not propose to value all land; he did not propose to value agricultural land and put an increment value duty on it. He proposed to value developed land and put an extra tax upon it over and above the Schedule "A" tax which that land was already paying. The Chancellor of the Exchequer at that time joined with the others in compelling Lord Snowden to withdraw that tax and Lord Snowden had to content himself wilth a bare formula, which may have satisfied his soul but brought not a penny piece into the nation's purse. That was double taxation; and if it was


wrong then, according to the Chancellor of the Exchequer, it must be wrong now. What justification can there be for upsetting trade? [Interruption.] I would tell hon. Members who interrupt me that when I have conscientiously made up my mind in regard to a matter I do not hesitate to say it in this House. I have never hesitated to go into the Lobby to support the opinions which I have expressed on the Floor of the House.
What possible justification can there be for upsetting trade just when it is improving? Why should not the Chancellor of the Exchequer have stuck to the true principles of finance and taxation? If it was necessary to raise more money and necessary, as I believe it is, for us to insure ourselves against aggression, he should have put the matter upon a fair basis, so that everyone could bear his fair share. He should have put it upon the Income Tax. In that way it would be spread evenly on the shoulders that can and should bear it. This tax, I agree, is upsetting everyone with the exception of, as the right hon. Gentleman the Member for Caithness and Sutherland (Sir A. Sinclair) rightly suggested, the lawyers and accountants. My own profession has been doing not too well for the past six years, but it seems that the Chancellor of the Exchequer is providing it with a harvest that sorely tempts me to go back to it. But why does the Chancellor select particular persons for taxation and leave out the others? Why is it that the lawyers, accountants, stockbrokers, the rentier class, and the wage-earners are not brought under this tax? Why differentiate between any classes? The only reason I can suggest is that these people I have mentioned are the voters, and the Chancellor's sympathy is going out to them. It is apparently thought better to tax the trades upon which the professions, the wage-earners and the rentier class depend for a living. The voters will not notice that they are being taxed, so all will be well, and another election will be won.
The small trader making up to £2,000 profit is exempted completely and even the one making up to £10,000 gets a certain amount of exemption. Why should the small trader be specially selected? Is it because, although his profits may be small, his voice is large and his votes

numerous? Is it because it is so difficult to trace where the incidence of this tax may be falling? The Chancellor does not merely discriminate between one section and another section. between the trader and the professional man; he discriminates between trade and trade. Those trades that have done well in the past will scarcely suffer. Those that have done badly will be punished.
Let me give some figures taken from those published by public companies. What the Committee will find is that those companies which have been selling commodities direct to the public have maintained their profits and possibly even increased them throughout the period of the slump, but those which have been producing, especially raw materials and primary products, are the very ones that have suffered. Take Woolworth's: In 1931 they had a dividend of 40 per cent.; in 1932 70 per cent.; in 1933 and 1934, 80 per cent.; in 1935, 80 per cent, plus a bonus of 20 per cent. and a capitalised bonus of 100 per cent. The Chancellor is going to take the three years from 1933 to 1935. I do not suppose that Woolworth's can make a dividend above the average for those years plus a capitalised bonus of 100 per cent. in the future.
Take the well-known caterers, Lyons: They had a steady 22½ per cent. from 1931 to 1935. Imperial Tobacco had in 1931 a dividend of 15 per cent., plus a bonus of 7½ per cent.; in 1932 and 1933, 15 per cent., plus a bonus of 5 per cent; in 1934, 15 per cent., plus 7½ per cent.; and in 1935, 15 per cent., plus 9 per cent. The International Tea Company had a steady dividend of 30 per cent. throughout the five years. British Insulated Cables had 15 per cent. from 1931 to 1934 and 20 per cent. in 1935. It is necessary to mention my own company, because it is supplying a commodity which the public needs. It returns a steady 15 per cent. without variation from 1932 to 1935. Much increase in the dividends of these people cannot be hoped for. The Chancellor cannot hope to get anything out of them except the ordinary taxation.
Let me turn to some other businesses. The Bradford Dyers from 1931 to 1935 returned a dividend of nil, not a penny piece. Coming to the steel manufacturers, Richard Thomas & Co. had nil in 1929 and nil from 1931 to 1933. In 1934 they


had a dividend of 6 per cent., and in 1935 it was 12½ per cent. Baldwins had nil from 1929 to 1933; they had 2½ per cent. in 1934 and 7½ per cent in 1935. Take Furness, Withy & Co. They reduced their capital. Companies which have tried to put themselves in order will be penalised because they have done so. The mere fact that they reduced their capital will be utilised against them. Furness, Withy & Co. had a dividend in 1931 of 6 per cent., and in 1932 3 per cent. From 1933 to 1935 they had a dividend of nil, and theirs is a general company, shipbuilding, shipping and everything else. John Brown & Co. had nil from 1929 to 1934, and a sudden jump to 16┓ per cent. in 1935, on a reduced capital. Take a producing company with which I am connected, which trades in West Africa, buying cocoa and the necessary fats and oils which come to this country. From 1931 to 1933 they had no dividend, but in 1934, owing not to increased armaments but to changed world conditions, they had a dividend of five per cent., and in 1935 they had 10 per cent.
What does the Chancellor hope to get? One has only to turn to the morning's newspapers and see at once the effect of his proposals. One newspaper has carefully divided the businesses into two classes. One is described as vulnerable to the National Defence Contribution. It consists of the producers that have gained nothing. The other class, the invulnerable, have been making high profits throughout the period. On the invulnerable there has been a slight drop such as one might expect because of the natural excitement on the Stock Exchange, but on the vulnerable there has been a drop of three per cent. in one day alone. That is bringing it home to them that they are going to be attacked. The Chancellor is going to punish the Bradford Dyers, the Lancashire Cotton Spinners, the shipowners, the shipbuilders, the mines and the producers of the raw materials and primary commodities. There is a pat on the back for the caterer, but heaven help the producer of the food; there is nothing for him except the possibility of further taxation.
That is my main objection to this tax. But there are other objections. It offends against so many of the canons of proper finance and taxation. The right hon. Gentleman the Member for Hillsborough

mentioned the tremendous expense that this tax will involve to the community at large. There is no company or trader in the land that will not be calling on accountants to go into all the figures possible to enable him to decide which of the two options is going to pay him better. You are going to upset every office while you go through your valuations. These, I now understand, are to be made upon the cost of the business. Why discriminate between one person who happened to buy when the market was high and the man who came in later at a low period? Concerning valuation, we are told nothing about what is going to happen in regard to goodwill. That is often the most valuable thing the company has got. Many people will be employed upon the work of valuation and their figures and documents will then be presented to the Inland Revenue. Is the Inland Revenue going to accept them on the face of the documents? Of course, it is not. It cannot, and the hardest worked Department of the Government to-day is the Inland Revenue. Yet you put the further great burden upon its back of checking all these valuations.
Look at the enormous expense it must involve to the community as a whole. Innumerable disputes will arise, as they did under Excess Profits Duty. Years will elapse before final agreement is reached, and then, as happened under Excess Profits Duty, a slump will inevitably come. Heaven forbid that it should be as bad as we have gone through, but it will come—it may be in five or ten years. By that time the Government will be satisfied as to the amount due. In one case, under Excess Profits Duty, it found it was entitled to £3,000,000, but the company was then in the hands of the Receiver and there was not a penny piece for the Government. Lawyers and accountants had had a rich harvest but the Government got nothing.
What is to be the effect of the tax on the holding and subsidiary companies. A question was put to the Financial Secretary to the Treasury last night with regard to that, but he asked that the question be postponed. Dare I suggest that possibly the Chancellor of the Exchequer has not thought out all the ramifications and repercussions of this tax before proposing it on the Floor of the House, and that the answer as to what is to happen to the holding and the subsidiary companies


is not easily forthcoming. Take the holding companies that have their subsidiaries abroad. What is to happen in regard to them? If they are induced to keep their earnings abroad, that will lessen the amount of invisible exports, at a time when everyone—the Chancellor of the Exchequer and the President of the Board of Trade—are crying out for increased export trade.
May I ask another question? What is to happen in the case of a company which has absorbed another company? I know of a case of two companies trading side by side in the same commodity, both manufacturing and both selling, where one company made an offer to the shareholders of the other company and said that if they would take the shares of company A in return for company B, the two companies could then be amalgamated. The company still remains the old company A. I suppose that during the coming years it will have the profits of the two companies added together, and presumably, since the two companies are now working as one instead of being in competition, the profits ought to be increased. Are they to be taxed on the basis of the old profits of company A in 1933, 1934 and 1935? I hope the Chancellor will bear that point in mind.
It is said that this is an abnormal time, that abnormal profits are likely to be made, and that it is right that those profits should be taxed, just as they were when the Excess Profits Duty was imposed during the War. There is, however, a fundamental difference between now and that time. Up to 4th August, 1914, trade had been running normally and profits had been normal. On 4th August, the cataclysm came. Prices went up, expenditure went up, and it had to be met; it was met rightly and fairly by asking for a further contribution from those excess profits that were being made. There was there a comparison between the excess and the normal, but in this case we have passed through the abnormal period, and the Chancellor is going to take that abnormal period as the normal. That will be his standard. He has fixed the years 1933, 1934 and 1935—years when we were just through the abnormal period—and he has said that they are to be the standard, that he will tax on that basis, when we have just got into the

normal period, having come through the abnormal period.
Moreover, why is there this differentiation? Why attack the ordinary shareholder and leave unattacked the preference shareholder? Both of them depend upon industry and trade. The ordinary shareholder has had to suffer all through the period of depression, and he has gone without a penny piece of dividend. If there was anything left which might have gone to him, he was the man who had to see that the buildings and the plant were kept in order, because if they failed and if the companies failed to pay preference dividend, the whole thing collapsed. The ordinary shareholder had to bolster up everything, especially the preference shares. The preference shareholder will continue to pay his Income Tax and in some cases his Super-tax; but in the case of the ordinary shareholder, before he begins to draw anything, having seen to the preference shareholders, having seen to the payment of debenture interest, and having seen to capital, if there is any profit left over, the Chancellor will compare it with the profits in 1933, 1934 and 1935, and say that he will take one-third, one-fourth or one-fifth as the case may be. Then, on what is left, the ordinary shareholder will pay what the ordinary man pays. Why punish the ordinary shareholder who is, after all, the man who is really doing the work—he is the worker —whereas the preference shareholder is always protected?
Finally, it was emphasised that this is to be a temporary tax, but I noticed that the Chancellor refused to commit himself as to the length of time. When he spoke about its being temporary, I wonder whether he watched the faces of hon. and right hon. Gentlemen opposite. I realise that there is the possibility of a slight difference of opinion between them as to whether the tax is a good one or not, and I realise that not all hon. and right hon. Members opposite belong to the co-operative wholesale movement, a movement which this tax will undoubtedly hit. Moreover, there will come a change, there is bound to be a turn of the tide, there is bound to come a time when another Chancellor of the Exchequer from the benches opposite will be on the Treasury Bench: does the right hon. Gentleman think that in that event another Chancellor will willingly discontinue this tax?
Will he not call it by some other name, such as a "social reform tax"?
I would ask the Chancellor of the Exchequer whether he recalls one incident told to me by the late Sir Austen Chamberlain of the occasion when his late father had been invited to go to Hawarden to see Mr. Gladstone, after his retirement. It came as a matter of great surprise to me that the two were on specially friendly terms, considering what had happened. Sir Austen went on to say that when Mr. Joseph Chamberlain ca me back, they all gathered round to find out what the old man had said, and the reply of Mr. Joseph Chamberlain was that the old man had spent the whole time denouncing Harcourt's Death Duties as being unsound finance. Mr. Joseph Chamberlain was in favour of them, and tried to defend them, but the old man was so adamant that at last Mr. Chamberlain fell back into saying, "Well, it is only a small tax and will never be increased," and at once the old man pounced and flashed back, "Wait—whenever you get a Chancellor of the Exchequer who has to find more money and has not got the strength to add to the Income Tax, he will go to the Death Duties in order to make up his deficit." That is precisely what has happened.
The Chancellor says that this is a temporary tax. Does he really believe that? Once a tax is imposed, it is practically impossible to take it off. What does he hope to gain? I assure the Chancellor, if he does not know it already, that not a single vote which is being cast for the other side will be cast for him because of this tax. This tax is a bad tax fundamentally, and I am opposed to it. As I said earlier, if I believe conscientiously that it is a wrong tax, I shall not only speak against it, but I shall vote against it.

5.25 p.m.

Major Owen: I have listened with a great deal of interest to the attack which has been made by the hon. and learned Gentleman the Member for Montgomeryshire (Mr. C. Davies) upon the new proposal in the Budget. What has struck me particularly is the difference between the reception given to that tax in the Chamber and in discussions outside the Chamber. It can safely be said that it was received with the greatest gloom by

hon. Members opposite when it was announced by the Chancellor on Tuesday, and that when hon. Members went into the Lobbies and into the Smoking Rooms the language which they used about the tax was language which certainly would not be permitted within the confines of the Chamber. I might even say that the language was rather turgid in quality. [An HON. MEMBER: "Give an example."] I am afraid that if I were to give an example, I should be called to order immediately. However, the remarkable thing is that the tax has been received so quietly within the Chamber. If it had been introduced by Mr. Snowden, when he was Chancellor of the Exchequer in the Labour Government, there would have been the greatest imaginable outcry. But what has happened in this case? The President of the Federation of British Industries gave it his blessing, almost immediately after it was announced and before either he or anybody else could have had time to understand its implications. Because it comes from a Tory Chancellor in a National Government, everything is all right, and we must accept the tax without any further discussion.
I do not wish to cover the ground which was covered by the hon. and learned Gentleman the Member for Montgomeryshire, but this tax differentiates between different industries and even between different companies in the same industry. It makes two classes of the companies engaged in industry. There are, in the first place, those who went through the years of depression and maintained a fairly even level of profits. It is the company which has been struggling to maintain its existence, which has taken upon itself the duty of putting its finances in order, and which has not paid anything in the way of dividends that is going to be very severely penalised. I believe there is truth in what has been said in certain organs of the Press and what has been said freely in the Lobbies of the House. This tax will penalise those companies which have followed a policy of financial probity and soundness, but it will give an advantage to those companies which have watered their capital, issued bonus shares and all that sort of thing, practices which we know in the past have led to serious difficulties in trade and industry.
What is to happen to those industries which have been struggling to maintain their existence during the depression—for instance, the cotton industry? For years they have been struggling in Lancashire and now they are beginning to see a revival in world trade, but the Chancellor comes along and tells them that he is going to compare their profits now with their profits in 1933, 1934 and 1935, that he is going to find their standard rate of profits for those years, and that if they make any profits now he is going to take one-third, one-fourth, or one-fifth of them before they have time to build up fresh reserves. I am very glad that the hon. and learned Gentleman opposite is opposed to it. He is the first who has had the courage on the Floor of this Chamber to draw the attention of the Chancellor to what has been freely and generally said outside. There is, I think, some of the language that I heard which I can quote without being unparliamentary. One description of the tax that I heard was that it was "Communism without bloodshed."
A good many hon. Members above the Gangway received the proposal on Tuesday with a great degree of favour. It reminds me of the old Latin saying, "Timeo Danaos et done ferentes"—"I fear the Greeks, even when they bring presents." I think that there must be something behind it. Why has the Chancellor introduced this tax at this time when he hopes to get only a paltry £2,000,000 from it? He could have all he needed by an extra 3d. on the Income Tax, and the whole country would have been prepared to receive it and to defend it. What is there behind it? Is it, as has been hinted by the hon. Gentleman opposite, a bit of a sop to the Labour party? Is it because the Government fear labour troubles in the country and are putting this forward as a political stunt to curry favour with the working classes? This is really a question which the House is entitled to ask. Why is it that a tax of this kind, cumbersome to collect, which will put industry into serious difficulties and cause a great deal of expenditure has been imposed at this time when the Chancellor expects to get only £2,000,000 from it this year, and even in a full year no more than £25,000,000, and possibly only £20,000,000?
Is it worth while to put an imposition of this kind upon industry just as it is beginning to recover? We all sympathise with the Chancellor's intention, if it is his intention, to prevent profiteering by armament firms, but is there not a better and shorter way of doing that? Could not the Chancellor, with all the technical information at his disposal, have brought forward something simpler and fairer than this cumbersome, unwieldy and costly experiment: Speaking on the Budget proposals 12 months ago, I mentioned the great increase that has taken place in indirect taxation, and I made an appeal to the Chancellor then not to increase the burden which was already so heavily laid on the shoulders of the working classes. There has been a natural increase last year in the Customs and Excise duties. There will be an increase again this year. That burden is continually going on, and I want to congratulate the Chancellor, at any rate, for having taken compassion on the working classes by not adding to the indirect taxation in this Budget.
The thing that strikes one first in this Budget is the staggering and stupendous size of the total amount. When we look back to 1914, we find that to-day, in a time of peace, when there is no war, at least, in the immediate offing, the total of the Budget is nearly five times as much as it was in 1914. It is twice as much as the Budget total in 1915, even after the War had been in progress for a year. This is a staggering total, and yet it is being done in a time of prosperity. I remember the Chancellor saying that he now saw the opportunity of leaving "Bleak House" and entering "Great Expectations," but he has taken us back into a far bleaker house than anything he took us out of. May I again emphasise the real danger which may arise from the Government's policy of rearmament and in taking from industries, which are just recovering from the slump, some portions of the profits which might otherwise be used in order to get ready to meet the next slump? I was reading yesterday the report of the Director of the International Labour Conference which has been published this week, and I would like to quote a paragraph from it. This is what he said:
Perhaps the most outstanding lesson of the slump is to be found in the profound change which it has produced in ideas about monetary policy. In this field more than in


any other lies the key to economic prosperity and social progress. The demonstration that in one country after another the upturn in business and employment coincided not with the reduction of wage rates, the cutting of costs, or the deterioration of working conditions, but with the abandonment of deflation and the adoption of monetary expansion has made a deep impression upon the world. As a result, the whole outlook on the future of social and economic policy has undergone a radical change.
To the conviction that Governments must Intervene to ward off or to attenuate depressions is added the belief that that if the secrets of a new technique can be mastered, they can take effective and appropriate action.… For the first time, we are witnessing the deliberate attempt by Governments, such as those of Sweden and the United States, to construct machinery for arresting the downward swing of the pendulum when it sets in, and thus averting another economic cataclysm. Instead of passively awaiting the onset of the next hurricane in the old spirit of fatalism, some measure of forethought, contrivance and calculation is now being applied in order to withstand it.
I would like to ask the right hon. Gentleman whether he is providing any measure of forethought, contrivance or calculation in order to withstand the slump that is to come upon us. It would have been far more beneficial to the country as a whole had it found in this Budget some preparations which would enable the country to face the future with equanimity and to enable it to overcome whatever slump may be ahead.

5.40 p.m.

Mr. R. C. Morrison: I hope that the Chancellor will not be misled by the scanty attendance on these benches and the benches opposite into thinking that the proposals of the Budget are likely to go through easily, if I may judge by the reception that they have had outside. The forceful speeches delivered by the right hon. Member for Hillhead (Sir R. Horne) yesterday and the right hon. Gentleman this afternoon give some indication of the feelings which are running among business people about the Budget. The right hon. Gentleman has been a little unfortunate inasmuch as his sixth Budget is the least popular and that his Coronation Budget has not been a startling success. The Chancellor is having what is called a bad Press, but not only in the Press, but in the buses, trams and tubes one can hear the general trend of conversation. I have not heard one word of eulogy of the Chancellor and his Budget. Indeed, I heard an expression used by a bus conductor to-day

when he was discussing the matter with some of the people inside his bus. I fail to understand it, but there may be some hon. Members who understand it. He said that "The N.D.C. was N.B.G."
One of the bitterest comments in the newspapers this morning was that even a Labour Chancellor could not have done worse. Had this proposal been introduced by a Labour Chancellor I think that hon. Gentlemen opposite—to use a colloquialism—would have lifted the roof off. The House of Commons would have been crowded. There would have been deputations of people seeking for the head of the Chancellor on a charger. When I saw a headline in one of the leading financial papers to-day—"Chancellor's Budget; panic on the Stock Exchange" I opened my eyes and wondered whether it was a Conservative Government and a Conservative Chancellor. I thought that the brightest and most entertaining part of the Chancellor's speech was that in which he dealt so eloquently with the remarkable number of suggestions for new taxation which had been sent to him, and which he had collected together alphabetically. While I was reading through the financial columns of the newspapers this morning I came across such a remarkable variety of expressions in regard to this Budget that I fell into the Chancellor's new habit of collecting them alphabetically. These are some of them "anger," "astonishment," "bludgeoning," "bleeding industry"—

Mr. Churchill: Now be careful.

Mr. Morrison: The right hon. Gentleman need have no fear. There were also "dismay," "disaster," "erratic," "enrage," "farewell," "folly," "futile," "Gradgrind Chancellor." Not being a learned person I betook myself to the dictionary to see what on earth "Gradgrind" might mean, and it is defined as
One who regulates all human things by rule of compass and the mechanical application of statistics, allowing nothing for sentiment, emotion and individuality.
The word is derived from Thomas Gradgrind, of Charles Dickens's "Hard Times." Then there were "height of folly," "hamshackled," "insecurity," "instability," "Jerry," "Jumping Jack," "knavish," "loose," "malignant," "numb," "oppressive," "perilous," "quarrelsome," "ramshackle,"


"slapdash," "tangled," "unwarranted," "unfair," "violent," "vicious," "wicked," "wanton." There was not one word for "X," and so I had to use the word "extraordinary." A word appears in another paper which I did not understand, "Yahoo," and so again I looked at the dictionary, and found it defined as "a despicable character." When I had got to "Z" I thought I ought to look for something a little less unkind to the right hon. Gentleman, and I found that one paper refers to his Budget as being the Budget of a "zealot," and my dictionary says that a zealot is "one who is warmly engaged in anything."
I am glad that it was not a Labour Chancellor who introduced this National Defence Contribution, because I think that in its present form it is not going to work, and I propose to give one or two reasons for that view. There is a puzzling note running through the financial writers to-day. They cannot understand why the Chancellor of the Exchequer has indicated that only something like £20,000,000 will be derived from this tax next year. One paper goes so far as to say they think that something nearer £200,000,000 will be collected, but they add that they have no doubt that the people who advise the Chancellor of the Exchequer are people of great wisdom and understanding and that probably their estimate is not very far out. The only explanation I can find of why the Chancellor anticipates getting only £20,000,000 is that his advisers have made adequate allowance for avoidance of tax. My objection to the tax is that it falls on the just and largely misses the unjust. Investors in home industries will suffer a loss of capital and reduced dividends, while holders of foreign stocks will escape free. If this tax had been imposed a year or two ago, to take one company, the well-known Mond Nickel Company, the shareholders would have been hit by the tax, but within the last year or two the Mond Nickel Company has been absorbed by the International Nickel Company of Canada, with the result that the investors in the Mond Nickel Company, now that they are shareholders in the International Nickel Company of Canada, will accidentally escape. The Rand Gold producers and most South

African ventures escape altogether, but, on the other hand, West African gold companies and Rhodesian copper mines shoulder the new tax.
How long are these people going to pay these taxes? Just as long as it takes them to transfer their English domicile somewhere else. It is stated that there is something like £400,000,000 of British capital invested in rubber companies, and everybody knows that the shareholders of rubber companies have had an exceedingly bad time over a period of years, and that only now, when the rubber regulation scheme is getting into force, are their dividends beginning to mount up. There have been several years in which many companies have not paid any dividends at all. These rubber companies have only got a clerk in their London offices. How easy it would be for them to escape the incidence of the tax by transferring the clerk to Malaya, or wherever the rubber is grown, where he can do the work just as well as in London. It only means transferring the registration from England. It has been recalled in one of the financial papers that when the old Excess Profits Duty was imposed Aramayo, Burma Corporation, and De Beers Consolidated all shook the dust of London off their feet and migrated to Geneva, Rangoon, and Kimberley, and there is no doubt that we shall see a continuation of that process.
The Chancellor of the Exchequer made a surprising statement. Nearly everybody expected that he would impose a stamp duty on medicines, and he said that he had not done so and was not going to do so for two reasons. The first was that the subject was very complex and difficult; and, secondly, he said that he was afraid it would take a lot of Parliamentary time. What Members understood was that owing- to the long recess the House is to have at the Coronation the Government were desirous of getting the Budget through as expeditiously as possible, and therefore decided that this proposed medicine duty, which people anticipate will mean a considerable revenue for the Treasury when it is imposed, must stand over for another year till he can look further into the complexities of the position. Does not the same consideration apply to the National Defence Contribution? Certainly


it is complex. If the Chancellor doubts that he has only to read the newspapers, and to read the speech which I am now delivering. The subject is certainly complex and will take up a considerable amount of Parliamentary time, because meetings of manufacturers all over the country are being summoned by telegram, and they are not going to put up with the new tax without some fight.
would bring to the notice of the Committee one case which is known to me personally in which a man, together with the members of his family, put £18,000 into a business which he has been building up. He has been engaged in pioneering for seven or eight years and has made no money. The members of the family who put in money have had no returns upon that money, and he has been drawing only just enough to keep going, because he thought he was "on a good thing." He was engaged on the production of a refuse container. Within the last few months he has begun to see a chance of winning through. He has received certain substantial orders which may enable him to make up what he has lost. This man is engaged on making an article for the public health service, nothing to do with national defence or armaments, but he is going to suffer when he reaps the harvest of his seven or eight years' pioneering. And apart from his product having nothing to do with national defence he will be penalised because of the national defence programme, as all his materials will cost him more than otherwise would be the case.
My final point is that the Budget is not dependent on this £2,000,000 which the Chancellor will get from the National Defence Contribution. Why should he insist upon taking up a good deal of Parliamentary time, interfering with the Coronation, stirring up a great deal of hostility and bad feeling throughout the country at a time when we want peace and good will, for a beggarly £2,000,000 which does not make any difference one way or the other to the present Budget, whatever it may do for future Budgets. A few years ago a predecessor of his, the right hon. Member for Epping (Mr. Churchill) introduced with a great flourish of trumpets in one of his Budgets a proposal to tax bookmakers. We did not have to wait long before the right hon. Gentleman had to admit that the matter

was too complicated, and that it was impossible to make anything out of it. The right hon. Gentleman frankly admitted that, and the tax was ultimately abandoned.

Mr. Churchill: What about kerosene?

Mr. Morrison: There is a saying in America that the man who gets on in life is not the man who never makes a mistake, but the man who never makes the same mistake twice. I am suggesting that the Government should not make the same mistake twice by forcing the National Defence Contribution through the House, because in my opinion it is not going to work, and even if it does it will not produce any considerable revenue. I suggest that the matter might be left over in the same way as the Medicine Stamp Duty for consideration during the year, so that the Chancellor, if he is going to pursue this matter further—and I am not sure that I should be opposed to it—should be able to bring it forward after much greater consideration had been given to it, to ensure that the incidence of it shall be much fairer than it will be under the present proposals.

5.58 p.m.

Sir Arthur Salter: I feel very happy that the first Budget speech I should hear as a Member of this House was one that was at once so fascinating to listen to and so interesting to study. It is with considerable diffidence that I rise to make my first speech here on a subject which is both so important and so complex, particularly as such experience as I have collected in regard to Budgets and public finance has been mainly in other countries and with regard to other systems. For this reason I shall, with suitable modesty, circumscribe the scope of what I have to say. I shall not attempt to go over the wide ground traversed by, for example, the right hon. Member for Hillsborough (Mr. Alexander) this afternoon. I do not propose to discuss our general financial policy, our general financial situation or our general financial structure. I do wish, however, to make a few comments on some of the specific proposals made to us by the Chancellor on Tuesday afternoon. I can at least promise that whatever views I express will be completely uninfluenced by any views which I have on the Government's policy in other spheres and on other matters.
Incidentally, that enables me to illustrate what I conceive to be the proper position of an independent Member. The independent Member is still a rare, though I am glad to say not an entirely solitary, animal, in this House. There has been a good deal of speculation, and I think a good deal of misunderstanding, as to what I meant when I said to my constituents that I proposed to stand as an independent. I remember a few years ago a right hon. Gentleman who has taken a considerable part in the Debate but is not here at this moment, asking me what I understood to be the position and character of an international officer. I did my best to explain to him, and when I had finished he said, "That is all very complicated. An international officer is a queer kind of creature. I should call him a kind of hermaphrodite." That expresses the view that many people have of the position of an independent Member. My own view is that it is at once his privilege and his duty to express his views on specific proposals without regard to what may be his views on other matters.
I propose then to assume and take for granted everything that we knew when we came into this House on Tuesday afternoon, and to comment only on the new proposals then made. With that limitation, which is of course a very important limitation, I say at once definitely that I very cordially welcome the main principles upon which the new proposals for taxation are made, in the first place because those proposals are for direct taxation. I have very greatly regretted the way in which, for a number of years, the proportion of indirect taxation has increased, because I remain of the view that normally, though not, of course, in every case, indirect taxes operate as a kind of Income Tax graduated the wrong way round, bearing more heavily upon income in proportion as the class affected is poorer and has a smaller income. I do not think this country has yet realised how far, for example, the cost of the great extension of the social services in recent years corresponds with an increase of indirect taxation. The extension of social services has to a very great extent operated not to redistribute wealth or income, but has had a contributory character, being mainly paid by an increase

of indirect taxation by the classes benefited by the social legislation.
I rejoice therefore that the Chancellor with his present proposals is stopping, and to some ex tent correcting, this development. I welcome for another reason the principles on which the proposals are based. I am very glad that he has not limited his vision, or his provision, to a single Budget year. He might so easily and so reasonably, on the general statement of the finances he put before us, have confined himself to the practically undisputed increase in the Income Tax, and left to his successor the odium of providing for the greater expenditure that will follow in later years; but he resisted that temptation, and in doing so he chose a tax which presents, or certainly is likely to present, very considerable difficulties to himself in the course of this Debate. One of the most amusing parts of his extremely interesting speech was the description he gave us of the many kinds of suggestion made to him by correspondents for additional taxation. There was one feature common to all proposals; each of them desired to remove the incidence and inconvenience of any new tax as far as possible from himself, his own circle and his own friends. No one can charge the Chancellor of the Exchequer with being animated by any such desire when he chose his National Defence Contribution, and for this reason I greatly welcome the main principle upon which these proposals are based.
At the same time, it would be both presumptous and premature to express a definite opinion as regards the practicability and equity in all possible cases of the National Defence Contribution. I do not think we have yet sufficient information, despite the very considerable enlightenment given to us by the Financial Secretary last night. It is only when we get the Finance Bill, and indeed only later when in practice the adjustments are worked out, that the country will be able to judge how equitably this tax is likely to operate. I would venture, however, to make a few tentative reflections and to ask a few tentative questions. In the first place, the rate of duty rising to one-third, while it would of course be very low if a duty were confined to those industries which are making increased profits as the result of the new armament


expenditure, is rather high when applied to all industries making increased profit for whatever reasons. If we were considering only the armaments industry, I think we should all feel that we should like a very much higher rate, and I sincerely trust that these proposals will not be alternative to the unanimous recommendation made by the Royal Commission.
We understand in any tax of this kind, the difficulty of drawing a line. These proposals apply to all industries, including those which are not getting their increased profits as the result of armament expenditure, Government expenditure or Government action, but as the result partly of the up-turn of the trade cycle and partly as the result of special skill and enterprise. In these cases, I daresay it has occurred to many of us that the results may very often be such as will result in considerable hardship and also discourage a very desirable increased activity in the depressed areas and elsewhere. Those hardships and inconveniences are limited by the special provisions which the Chancellor has explained. It is difficult to estimate the exact working of those provisions at present. In particular, it is very difficult to realise what would be the precise character and effect of the capital assessment which is so integral and vital a part of the whole of the scheme. The capital assessment is, of course, vital, not only if one chooses the capital standard but even if one chooses the profit standard in determining that the rate of tax according to the "region" in which the particular industry falls.
We do not know what will be the precise definition of capital for this purpose, but I venture to express a doubt, however capital is defined and whatever adjustments are made, whether any definition can be found that is quite strong enough to bear the weight which is imposed upon it by this scheme. I would venture very tentatively to ask whether the Chancellor of the Exchequer could not, perhaps without reducing the total yield which he contemplates, produce the same result with less hardship and less inconvenience if he reduced simultaneously both the exemptions and the maximum rate of tax. I throw that out just as a suggestion for which I would ask some consideration.
That is all I propose to say on that particular proposal, but I would like to

add one word on the third proposal of the Chancellor which I also cordially welcome, namely, his proposal to limit evasion. I wish he had gone rather further. I do not think his present proposals deal with some of the most serious forms of evasion. In the Budget of last year I think he introduced in Section 8 of the Finance Act a provision under which certain assignments to children were deemed not to be irrevocable, and thereby he stopped a certain evasion of Income Tax within that sphere, but that sphere was limited only to assignments to children. I wonder whether the extension to certain other cases would not be extremely useful in stopping certain devices particularly those known technically as accumulator devices. I would venture to suggest that the point might be considered.
That is all I have to say, with one exception, on the Chancellor's statement, but in passing I would like to comment on the remark that he made to the effect that our situation, difficult as it is, would be much more difficult had our credit been weakened by large expenditure on public work during the time of depression with the view of stimulating economic activity. I have no quarrel with his actual statement as he made it, but I fear it may in some quarters be interpreted as indicating the view that public expenditure and Budget policy cannot be usefully employed to correct the workings of the trade cycle. On this point I entirely agree with the right hon. and gallant Member for Ripon (Major Hills), who spoke on the subject yesterday. There is no point, I think, on which economists are more generally agreed—although they are agreed on a great many more points than is generally admitted—than that it is extremely useful that expenditure on public works should expand at times of depression and be restricted at times of prosperity. While, of course, the precise moment at which the armament increase is required is imposed by external events, I think we should all recognise that it is from the economic point of view regrettable that it should come at this moment rather than during the period of depression.
That is all I wish to say on the Chancellor's statement, but if the Committee will allow me a few minutes I would very much like to add a few remarks on one aspect of wider policy. I very


cordially agree with the opinion expressed by several Members that the whole environment in which any particular Budget has to be framed, would be substantially improved if we could restore, in conjunction with other countries, our international trade more widely and more extensively. There were in 1931 very special reasons, the strength of which I personally recognise, for imposing certain restrictions at that time upon the inflow of foreign imports. But I think there are at this moment, in 1937, equally strong reasons which should convince even the most convinced Protectionist that there is a strong case and urgent need for modifying our present policy in some respects. Our danger now is not too rapidly falling prices but too rapidly increasing prices. Our danger now is not surpluses but shortages, and if we have not succeeded in re-establishing the framework of external trade, I am certain that when armament expenditure slackens and the downward turn of the trade cycle comes, the position will be infinitely worse and more disastrous than it would otherwise have been.
I believe we have a great opportunity of joining with other countries now in re-establishing international trade. We know the attitude of the United States, of France and the other countries which recently met at Oslo. What is our own attitude? Many Members must, I think, have read with great regret the memorandum handed by the Prime Minister to the deputation on 22nd March. I personally read it with dismay. On reflection I was a little less dismayed, for this reason: I have been a humble student of the Prime Minister's speeches and writings for many years. I sometimes admire his policy; I always admire his literary style; and I am convinced that, while he may have approved of this memorandum, he certainly did not write it. More than that, on further reflection it seemed to me that it was quite clearly just a defence—a not very vigorous defence—of the past, and not an exposition of a recently formed policy of the Government. Later indications are much more promising, I think, of what is the real mind of the Government in this sphere.
I am, indeed, convinced that, if the Government will consider the whole of

this problem broadly, taking into account not only the immediate but the longer-term economic effects, and above all, perhaps, the political effects, of securing an agreement which will enlarge international trade, they will come to a right conclusion. What I am much more afraid of is that, in the absence of any definite decision on trade policy which will determine the instructions to those who engage in specific negotiations, those negotiations will be on too narrow a basis, and will pay too little regard to the broader aspects of the question. I agree with the right hon. Gentleman the Member for Hillhead (Sir R. Home), who said that perhaps the first step is to secure an agreement with the United States of America. I believe that that is practicable if the instructions given are, as I say, based upon a broad view of policy.
I would add that I should like to see any agreement made with America extended to France, to the Oslo countries, and even still wider. We all know that the triple declaration at the time of the franc devaluation served an extremely valuable purpose. It would be much more valuable if it proved to be, not the end, but merely the beginning of a much wider movement. I am convinced that, if this country and the Dominions would, in the weeks which precede the Imperial Conference, face the whole of this situation with full regard to the political results of any agreement, a step forward of the utmost importance could be made.
May I say one last word in relation to the international situation generally? I think we are all conscious of the fact that during the last few months there Las been a sensible, though still indecisive, improvement in the general state of international relations, due to many factors, among which personally I should put very high the personality of M. Blum. If we could throw, into the balance of the forces making in the one direction and in the other, the effect of the visible and successful co-operation of the three great countries of the world in extending the range of peaceful commerce, I believe that the task in every sphere of diplomacy would be appreciably assisted, and I believe that the whole international situation would be transformed.

6.20 p.m.

Sir William Davison: I should like to congratulate very sincerely the hon. Mem-


ber for Oxford University (Sir A. Salter) on the thoughtful and most happily phrased speech with which he has just delighted the Committee. I feel sure that the House will look forward to an early intervention from the hon. Member again in our Debates.
I do not propose, in the few remarks which I intend to address to the Committee, to follow the three hon. Members who preceded the hon. Member for Oxford University, and who spoke at length on the National Defence Contribution tax, and, indeed, discussed it literally from A to Z. I trust, however, that the Chancellor, when replying to the many weighty points raised by those hon. Members, will be able to reassure many of us on this side of the House who have grave doubts at present as to the wisdom of this form of taxation. Before making a few general criticisms of the Budget, I should like to be permitted to join with other Members who have addressed the Committee in congratulating my right hon. Friend the Chancellor on the manner in which he has administerd the finances of this country during the past six years, whereby they have been lifted from a quaking quagmire on to the hard highway of prosperity. I regret, however, that, owing to the all too long delayed necessity of putting our national defences in order, it has not been possible for the Chancellor to fulfil what he expressed to the House in his Budget speech last year as his desire to reward the long and patient endurance of the taxpayer in bearing his burden, and to give him some measure of relief.
So far from that desire being fulfilled, the direct taxpayer has once again had his burden increased, and the Chancellor has also failed to implement the promise which has been made repeatedly to the Surtax payer, that, when national prosperity returned and the cuts instituted in 1931 were removed, his additional special burden of 10 per cent. would also be abolished. That promise, I beg leave again to point out, has never yet been fulfilled. The Chancellor's record so far as the direct taxpayer is concerned is, I think, well summed up in the masterly cartoon which appears in the current number of "Punch," in which the Chancellor is depicted, not now as leaning on a team of patient oxen, but as a Bedouin Arab with a donkey burdened with six huge bales of taxes, while he takes leave

of the weeping, overburdened beast with these words:
Good-bye, old friend You've never failed me yet, and I hope your next master will be as fond of you as I have been.
I am indeed sorry in the national interest that the Chancellor, with his great ability and his great driving power, has done, during his six years of office, little or nothing to broaden the field of taxation and increase the number of direct taxpayers so that a larger number of the citizens of this country than is the case at present should have a direct interest in national policy involving increased expenditure and increased taxation. The net of taxation is, indeed, narrower than before. The total number of Income Tax payers is now only 3,500,000 out of a population of 45,000,000, of whom some 30,000,000 are voters; and, of these 3,500,000 Income Tax payers, only some 80,000 are Surtax payers. Yet this tiny minority of the population, if you add the Death Duties, which practically they alone pay, pay 50 per cent. of the whole expenditure of the country. I submit that it is not in the national interest that so small a fraction of the population and of the electorate should bear so large a proportion of the national expenditure.
This same small number of the electorate are now being asked, not only to shoulder a further 3d. in the £, following an increase of 3d. in the £ last year, bringing the Income Tax up to a total of 5s. in the £, and also the Surtax, to which I have already referred, and which still has the 10 per cent. which was put on at the time of the cuts and has not been removed, but to shoulder in addition a new impost in the form of the National Defence Contribution tax. I am bound to say that, as at present advised, I am seriously perturbed as to what the effect of this resurrected Excess Profits Duty will be, not only as regards its suitability for preventing profiteering on the manufacture of armaments necessitated by a national emergency—a thing which we would all desire—but as to the use to which this new tax could be put in the future, when the present emergency has passed, to cripple private trading and discourage individual enterprise.
Before I sit down, may I say one word as to the Death Duties? Once again, nothing has been done to enable taxpayers to make provision on reasonable terms during their lifetime for the payment of


this enormous capital duty which is levied at their death, and which is estimated to amount next year to no less than £89,000,000. Schemes prepared by eminent actuaries showing how this could be met during the lifetime of the taxpayer have been submitted repeatedly to the Treasury, and have always been turned down. The Treasury have actually refused to say why it was that these schemes, which, as was stated when they were sent to the Treasury, would not involve material loss to the nation and would be of material benefit both to the taxpayer with little, if any, loss to the Exchequer and to the country as a whole, have been rejected. These schemes have been rejected, and no details have been given of the reason for rejection. I trust that, when the Chancellor in due time is in a position to look at this important matter from a more elevated and detached point of view, he will appoint a committee of experts to go into these schemes which have been submitted to him, and any others, to see if it is not possible to enable this tremendous capital levy to be provided for during the lifetime of the taxpayer, when he is able to earn the money, without any material loss to the Revenue.
I should like to ask two questions in conclusion. Will it be made clear that the National Defence Contribution will not apply to public utility companies, such as water, gas and electricity undertakings, which are in no way affected by the heavy expenditure on rearmament and are for the most part administered under statutory rules which fix their dividends? It is possible that, unless they are expressly excluded, they might come within the ambit of this tax. The second question is what is the present position with regard to the recommendations and suggestions of the Income Tax Codification Committee as to putting into coherent shape the present anomalous statutes and rules dealing with Income Tax.

6.32 p.m.

Mr. Richards: We have listened, I gather, to the last financial statement that we are to get from the Chancellor of the Exchequer. I understand that, like his predecessor, who sat at the receipt of custom for a great many years, he is to be called to a higher place. I am sure that the good wishes of all the House will

go with him to that exalted office that he is going to occupy by and by. I have been puzzled, however, as to who is going to call him to this particular office. Is it to be the recording angel, who has taken note of all the good things and some of the bad things that he has done in the course of his six years of office as Chancellor, or is it that much more sinister, ghostly and ghastly angel, the angel of death, who at any rate has been rather well served during the two past years by the Chancellor. It seems to me that if the Chancellors of Europe would only do what our Chancellor has been doing and attempting to do, the angel of death would be found again to be abroad in this land, and in other countries as well. I could not help sympathising with the right hon. Gentleman because I felt that he was rather conscious of that terrifying spectre. He referred to it on more than one occasion. He said:
That last year, this year and for several years to come, the national finances have been, and must continue to be dominated and governed by an overshadowing consideration, namely, the vast expenditure upon Defence."—(OFFICIAL REPORT, 20th April, 1937, col. 1601, Vol. 322.]
Later on he amplified it, and said:
It was clearly laid down (in the Defence Statement) that although it was not yet possible to determine which year would see the peak, the level of Defence expenditure was likely, over the next two or three years, to be very much heavier than; in the present year."—[OFFICIAL REPORT, 20th April, 1937; col. 1614, Vol. 322.]
These are tragic circumstances under which to vacate that very responsible position. It has already been remarked that in all his Budgets he has been up against the same difficulty, that is to say that not a single one has been balanced. Unbalanced Budgets, I am afraid, are the result, among other things, of bankrupt policies, particularly in the foreign field, and I think the Government as a whole must share the responsibility for that failure, which is one of the responsibilities which have been shouldered by the Chancellor of the Exchequer. The present financial statement does not reveal the whole extent to which this Budget is not balanced. For example, £80,000,000 is to be borrowed this year for the purpose of defence, and for some reason or other the Chancellor suggests that borrowing in future years will probably have to be greater when it reaches


the peak and still, for some reason about which I am not very clear, he has decided that borrowing for the next four years is to be at the annual rate of £80, 000, 000.
The defence for this is that it is part of a scheme to throw a portion of the burden of rearmament upon future generations. The simple fact is that that cannot be done. The shells and guns and ships are wanted in this year of grace, 1937, and not in 1950 or 1960. You cannot fire a shell in 1937 that is going to be produced in 1950. The things that we require in the way of rearmament have to be paid for now. If the Government say they cannot pay for them now, of course, the Government is bankrupt. But it does not say that. It says it is not going to pay for them, but it is going to use its credit to borrow the £80,000,000, and the other £320,000,000, in order that it may throw a portion of that burden upon future generations. He said:
I am proposing for that purpose to borrow a sum estimated at £80,000,000. In view of that fact it would be absurd at the same moment to attempt to start a sinking fund for the redemption of debt.—[OFFICIAL REPORT, 20th April, 1937; col. 1605; Vol. 322.]
This is a very striking statement to make. He is adding to the National Debt and, unlike most Chancellors, he is making no provision, as far as I can see, for repayment of that debt.
I want to suggest another thought in connection with this borrowing. It means that you are taking out of industry a certain amount of capital which would presumably have gone into the production of ordinary commodities, and that means, among other things, that the prices of those ordinary commodities, as we see, are going up because of the difficulty of getting capital to produce them. You must pay for these shells and things that are produced now, and you must get hold of capital to pay for them, and you are taking that amount of capital from the market, and from other industries, with the result that the prices of other commodities are bound to go up because of an insufficient amount of capital to produce them. Another point is that you have to pay interest on the capital that you borrow, and that means that at the end of a certain period, when repayment comes, the shell which would cost you, say, £10 if you paid for it now,

will, with interest over a number of years, cost £15 or £20. It is a most extravagant way of producing these things and it is, of course, an argument for putting the total cost of rearmament, as was argued during the War when costs were very much greater, upon present taxation, because throwing it on the future simply means a more expensive system of production—a more extravagant system altogether.
It means another thing. One result of taking capital from the market and using it in rearmament is to increase the cost of other things to people who require them. By borrowing in this way we are really redistributing the wealth of the country. Those fortunate people who have the money to lend to the Government are able to place a lien upon the future production and the future taxation of the country. This is the way in which we made millionaires during the late War. We are depressing one class because of the increased cost of ordinary commodities and we are improving the position of another, the rentier class, because we are offering them a rate of interest for lending us the money, and the result will be not only that shells will cost more, but that the extra cost will go to the fortunate people who have been in a position to lend money to the Government. That is exactly what you have in every period of rearmament and every period of war. Some people are infinitely poorer at the end of a war and others, as we saw in the case of the late War, finish up by being infinitely richer than ever they dreamed they would be, and that is going to be the case with rearmament. Whether it lasts a long or a short time, we are gradually redistributing the wealth of the country in favour of the wealthy and against the poorer classes. The Chancellor, it is true—I think he was speaking his own mind with regard to this point—said:
I might, of course, increase indirect taxation, but the prices in the shops which particularly affect wage earners … those prices already show a tendency to rise, and I did not want to do anything to push them any higher."—[OFFICIAL REPORT, 20th April, 1937; col. 5655, Vol. 322.]
Borrowing is an insidious way of pushing those prices higher and of improving the position of certain wealthy classes in the community at the expense of the poorer ones.
This Budget is remarkable for one thing. It has been described, quite rightly, as being of the nature of a War Budget in peace time. I was sufficiently interested to look up some of the War Budgets and I was astounded to find that not until 1918–19, when the War was at its height, did they reach a figure of over £800,000,000. I am not referring, of course, to borrowing, nor am I referring to borrowing in the case of the figures for this year. In 1918–19 the Budget figure was £889,000,000. The standard of prices was very much higher than it is to-day. The index figure then was 230. If you correct the figures in relation to the purchasing power of the £ the Budgets work out in this way. In 1917–18, when the War was at its height, £382,000,000; in 1918–19, £436,000,000; in 1920–21, £639,000,000. The present Budget is £863,000,000. Therefore, this Budget is higher than the highest of the Budgets of the War period and it is no exaggeration to speak of it, as it has been described more than once, as a war Budget.
A rather more difficult calculation, but it is a very important one, is to try to find out what proportion of the total annual income of the community is absorbed by these Budgets. It is an extremely difficult calculation, but a very careful calculation was made in 1924 as to the total annual income of the community and, roughly speaking, it was a little over £4,000,000,000. Out of that total annual income Lord Snowden's Budget was for £795,000,000, or 20 per cent. I have tried to calculate the present total annual income, and I do not think I am very far wrong in suggesting that it is somewhere in the neighbourhood of £3,000,000,000, reckoning for changes in the index level. Out of that £3,000,000,000, the Chancellor of the Exchequer is proposing to take £863,000,000, or nearly 3o per cent., as against the 20 per cent. of Lord Snowden's Budget, although in the period of Lord Snowden's Budget times were much better than they are to-day.
I am not going to enter into the very debatable question as to the new suggested taxation, but I should like to say a few words about it. We on this side of the House feel that whenever there is a move in the direction of rearmament or whenever there is a war in the world,

certain people gain very considerable advantage out of it. Our attitude is that the Government ought to be strict in controlling profiteering. Apparently they have not the courage or they are afraid to tackle it from that point of view. Therefore, we on this side are, on the whole, very glad that the Chancellor of the Exchequer, quite rightly, is trying to take back some of the money that he is pouring out into industry at the present time.
We hear a great deal about individual initiative and the character of the work that is being done by industrial leaders in this country. I do not think we can deny the fact that it is the money that is poured out by the Government that is stimulating industry. We have already heard from the hon. Member for Oxford University (Sir A. Salter) that if anything happens to withdraw this assistance we shall be faced again with one of those catastrophic failures of the economic machine in which the economic machine will completely fail to function. We have recently had too much experience of that. In face of these facts, is there anything wrong, speaking generally, in the Chancellor of the Exchequer trying to recoup himself by taking back a proportion, I wish it were larger, of the money that he has poured out in order to stimulate industry? I hope very sincerely that he will make this piece of legislation watertight, so that nobody will be able to escape the taxation that he intends to impose.

6.50 p.m.

Sir Robert Rankin: I desire to say a few words concerning certain aspects of the Budget in regard to which I find some concern outside the House. That concern is not based upon nor connected with the large sums which now have to be spent in strengthening our national defences. I find that it is concerned with the ever-increasing permanent cost of our social services for, splendid though many of those services are, it is difficult in some cases to find any full or adequate return. The concern of which I have spoken is intensified by the tendency in the past of successive Governments, of all parties, to use the capital resources of the country, including the Death Duties, for the annual expenditure of the country, quite irrespective of the requirements of sound finance.
Less than 10 years ago, in the financial year 1929–30, as pointed out by the


well-known economist Mr. Kiddy, the total expenditure by the Exchequer was £701,000 excluding Sinking Funds. Last year it was £790,000 also excluding Sinking Funds. The actual rise in Supply expenditure was, however, much greater than £90,000,000, for the amount required last year for Consolidated Fund Services was £106,000,000 less than in 1929. It must be pointed out that whereas last year's extra expenditure on the Votes for the Fighting Services represented an increase over 1929–30 of £73,000,000, the Votes for the Civil Service and social outlays increased by no less than £123,000,000, and that notwithstanding a substantial decline under the head of War Pensions. When in 1932 the Government effected an annual saving of at least £30,000,000 by converting 5 per cent. War Loan into, a 3½ per cent. issue, and effected large savings in subsequent debt conversions, the investor was comforted by the thought that compensation would be forthcoming in the shape of reduced expenditure and lower taxation. But although for a brief spell Income Tax was lowered by 6d. to 4s. 6d. in the £, it was soon raised to 4s. 9d. and on Tuesday we heard that it was to be raised again to 5s. so that the taxpayer, nearly 20 years after the end of the War, is suffering a loss of income with practically no relief in taxation.
The last occasion on which the word "economy" was mentioned in this House was during the crisis of 1931, when economies were effected to the tune of about £70,000,000. As a consequence, confidence both at home and abroad was restored and balanced Budgets were the foundation upon which the present trade recovery of this country has been based. There was, however, something besides lack of equilibrium in the national balance sheet which was responsible for the financial crisis of 1931. That something was, among other features, indifference to the growth in unproductive expenditure and eagerness to obtain the bulk by revenue by direct taxation. Today there are signs that these tendencies are reasserting themselves. This consideration would not weigh so greatly in the country if there was a clearer recognition of the need for economy in nonessentials. The yield from Income Tax and Sur-tax at the present time may remind us that there is a limit to the yield

from direct taxation, while, similarly, the recent setback in gilt edged securities is also a warning that even cheap money cannot sever the close connection between extravagance in national expenditure, high taxation and the state of the national credit. I should like to repeat that I believe the concern outside this House is not aroused by temporary necessary abnormal expenditure on armaments for defence, but by the permanent increase of permanent expenditure not warranted by the facts and requirements of the present day situation.

6.56 p.m.

Mr. Bellenger: I rise with some fear and trepidation to take part in this Debate, after the broadsides that have been delivered from three different angles. I do not pose as a financial expert, but I should like to say a few words from the point of view of, shall we say, the man-in-the-street. In these days the man-in-the-street, as he is commonly called, is very much neglected. I listened with considerable interest to what the hon. and learned Member for Montgomery (Mr. C. Davies) said, but I have the feeling that big business can take care of itself quite well and will do so during the Committee stage of the Finance Bill. I should like to refer to a few of the remarks made by the hon. and learned Member for Montgomery because I think he overpainted the picture from the point of view of big business. One of his remarks was that the ordinary shareholder is the worker.
It is a well known fact that the ordinary shareholder is the holder of the equity, and if we take for a number of years the returns paid on ordinary shares—it is no good referring only to the lean period; we must take the fat periods also—we find that the financial newspapers and financial experts have tabulated the returns paid, and I believe I am right in saying that over a period of 30 years ordinary shares are the best holding in any company. Debenture and preference shareholders get fixed payment during slump periods, and during better periods, but the ordinary shareholder when times are good reaps the big benefit. I do not think that the Chancellor of the Exchequer's tax on the ordinary shareholder is wrongly conceived, but I shall have a few remarks to make about that tax later. As I


listened to the hon. and learned Member for Montgomery when he read out the list of companies that paid good dividends I thought it was a question of dog eat dog. It was one portion of big business against another portion of big business, and as the hon. and learned Member happens to be concerned mostly with that portion of big business which is not so lucrative and has not been so lucrative during the past few years he is naturally concerned about the new tax that the Chancellor of the Exchequer proposes to levy.
I do not agree with those who say that the Income Tax should have been increased by more than 3d., certainly not if that is to be done to the advantage of the proposed Excess Profits Duty. In our present system of economics I believe that direct taxation is probably the fairest form of taxation in order to distribute the wealth of the country. If the Chancellor of the Exchequer is persuaded, as I hope he will not be persuaded, to levy a greater tax on the Income Tax payers and to do away with the Excess Profits Duty, it would be very unfair, because, generally speaking, the large number of people who pay Income Tax derive their incomes from more or less fixed sources. With the rise in the price level to-day that will he an additional tax on the man-in-the-street, the ordinary wage-earner and that vast body of professional men, the middle classes, who only get a fixed income and cannot expand it as big business can in times like these we are now experiencing.
The hon. Member for the City of London (Sir A. Anderson) yesterday referred to the large Budget which the Chancellor has introduced. I regret these large Budgets but they are inevitable. They are inflated because the expenditure side is inflated. When we consider the inflation that is taking place to-day in the prices we are paying for our rearmament, we must also admit that that inflation could be considerably cut and then the necessity for this Excess Profits Duty would not arise. Instead of paying these inflated prices for our rearmament we should exercise some control over the industry, and then the Chancellor would not be compelled to introduce a Budget of these proportions. The hon. Member for Huddersfield (Mr. Mabane) yesterday made some very provocative remarks, and I do not propose to deal with them except

to say—perhaps I may be allowed to give this illustration as two or three speakers have quoted Charles Dickens—that perhaps the hon. Member has "Great Expectations."
I would like to draw attention to one or two features of the White Paper. On page 8 I notice that there is a decrease of some 3,000,000 odd under the heading of roads. Am I right in assuming that that is largely due, if not entirely, to the roads which have been taken over by the Ministry of Transport, the trunk roads, and therefore less is required for contributions to local authorities? On page 10 I notice the amount collected in rates by local authorities has been increasing steadily since 1913–14, and there is no doubt that local rates are an additional form of taxation, but with this difference: that whereas national taxation is derived to a large extent from Income Tax payers, local taxation is derived from all classes of people. Everyone who pays rent contributes to these local rates, and therefore I am disturbed somewhat to notice the steady increase which has taken place in local rates. As regards social services, it has been remarked by previous speakers that these are paid for to a large extent by those who receive them, but I would like to direct the Committee's attention to two sets of figures, one on page 11 and the other on page 12. On page 11 the estimate of the cost of the Consolidated Fund Services is £235,000,000, and the amount to be spent on the Supply Services is another £198,000,000. These two figures almost equal the amount derived by the Inland Revenue from direct taxation—Income Tax, Surtax and Estate Duties—so that when complaints are made by those who speak on behalf of taxpayers it can be pointed out that the whole of these direct taxes go to pay for the Consolidated Fund Services management of the National Debt, and so on, and the Supply Services, the Army, Navy and Air Force.
There is one feature which the Chancellor has left out, arid which I should have liked to have seen in, and that is a bigger allowance for children. I know that last year he was able to make an additional allowance. Perhaps the Committee will forgive me if I speak as an entirely interested party, because I happen to have four children, and I know from personal experience the demand that is made on the average parent's budget.


Probably the largest demand on the average parent's budget is for the upkeep of his family, especially if he has a large one; and if I am ever Chancellor of the Exchequer—a remote possibility, I must admit—I give notice that I shall look much more favourably on parents who have large families than is done at present. Not only from the point of view of the parent himself, but from the point of view of the State, it is being emphasised more than ever now, even in this House with its large complement of bachelors, the necessity for large families. I suggest to the Financial Secretary to the Treasury, I am afraid with no hope of his paying sympathetic attention to what I am saying, that it might be possible for the Chancellor to give bigger and better allowances for children.
As to this Excess Profits Duty, when hon. Members criticise the Chancellor they must bear in mind that he has got to raise taxation to pay for the expenditure we are now incurring. We cannot have our cake and eat it. This House has passed huge sums for the Defence Services, and they have got to be paid for. On whom should the Chancellor put this tax. On whom should rest the responsibility of paying for these huge Defence measures with which we are saddled in this present mad armaments race? Should it be on the poor or on the rich? The answer is obvious. It should be on the rich. To a certain extent our defences may be for the purpose of defending our people against a possible foreign aggressor, but in the main these Defence Forces are for the purpose of defending property, and therefore the propertied classes should bear the biggest burden of the increased cost.
Either the Chancellor or the Financial Secretary told the Committee that rates on Treasury Bills during the past year had averaged 11s. 8d. per cent., and I noticed that in the White Paper, page 11, the 1937–38 Estimate for the interest and management of the National Debt is put exactly the same figure as for the previous year, £224,000,000. I wonder whether the Chancellor can rely on this 11s. 8d. per cent. being maintained. I rather doubt it, and I think that there are many who understand finance who are inclined to say that interest rates are bound to rise. However the Chancellor has budgeted for the same amount, and we shall see whether these figures come

out true at the end of the next financial year.
The questions which I wish to put to the Financial Secretary are these. First, will this new duty be chargeable in the same manner as Super-tax? Super-tax is charged on the net amount of the taxpayer's income. Income Tax is paid first, but that is not allowed for when Super-tax is charged. Will this new duty be charged in the same manner? My second question refers to holding companies and financial trusts. How is the Chancellor going to deal with holding companies which are probably controlling several subsidiary companies who do not distribute their profits up to the full? It is a well known feature of this modern company finance that subsidiary companies hold back for various reasons a large proportion of their profits, and then distribute them later in the form of bonus shares. It is a process which, I believe, in the financial world is referred to as "carving up the melon." How is he going to deal with these holding companies when their subsidiaries will probably not divide their full profits, but hold them back for later distribution in the form of bonus shares? Third—will the duty apply to building societies? Fourth, how is the Chancellor going to deal with new companies which have come into existence, as many of these armament companies have done, since the four years which he is taking as the standard years? How will he deal with them? Because he has told us that it is the taxpayer who has the option of deciding whether this tax shall be paid on the capital assets or on the profits earned by the company. I suggest to the Chancellor that it is his duty—I do not speak for big business in this respect, but for the smooth working of our industrial machine—to elucidate these points as quickly and clearly as possible because if a tax like this is to be imposed—and I have no objection to his imposing it, although I should have endeavoured to have found an easier way of getting the money—it is the duty of the Chancellor to tell the business world exactly where they stand.
I would like to end on this warning note. One or two hon. Members have referred to the question of strikes, and I think, viewing all the circumstances, there is a great danger of strikes occurring, with the consequent upsetting of the Chancellor's financial prospects and


upsetting of the workers' own lives if the employers, the Chancellor and the Government do not do something to meet the just demands of labour in these times of rising prices. There is a large proportion of our population who live on weekly wages or a monthly salary. With prices rising they are fearing insecurity, a smaller real wage with which to buy the necessities of life; and if the Government are going to admit the right of industrial concerns to higher profits, then they must admit the right of labour to a higher wage for its labour. During the slump period we were told that it was not possible to pay labour adequate wages, but to-day it should surely be possible to pay better wages than are being drawn by a large proportion of those underpaid people who, after all, contribute largely towards making these enhanced profits on which the Chancellor is preparing to levy his taxes.

7.15 p.m.

Mr. Vyvyan Adams: I should like to join the hon. Member for Bassetlaw (Mr. Bellenger) as a man in the street. I was under the impression that we were in the Chamber of the House of Commons, although I should not like to take anything for granted. I hope the Financial Secretary will be as pleased as I was to hear the general support given to the Government by the hon. Member for Bassetlaw, and I look forward to seeing him with myself and other supporters of the Government in the Lobby supporting the Second Reading of the Finance Bill. I was also glad to hear the hon. Member commit himself in advance, probably at some remote future date, to a widening of family allowances as, since the last Budget, I have myself for the first time become a father. If it is not too late I should like to add my insignificant congratulations to the Chancellor of the Exchequer. On Tuesday he took about 100 minutes to open his Budget, and we all know perfectly well that anything over 30 minutes on our feet is physically tiring. I marvelled at the ease with which he made the essential details of a difficult subject absolutely plain to all.
Before I come to the details of the Budget I should like to say something of particular interest to Members of the Labour party. I have no doubt that later to-night we are going to hear a

good deal about the Special Areas, a term which indeed implies that acute unemployment is now limited to certain specific areas in the country. But for the drastic measures which have been taken during the last half dozen years, the whole country would have remained a Special Area. I should like to prove that by the experience of the city I have the honour to represent, the City of Leeds. In June, 1929, just after the advent to office of the last Labour Government, unemployment in the City of Leeds was 9.2 per cent. or about one in 11 September, 1931, at the time of the downfall of the Labour Government and the formation of the first National Government, the percentage had risen to 24.8, or nearly one in four. On the last date for which figures are available, March, 1937, the percentage of unemployment in Leeds had fallen to 8.6 or about one in 12. Moreover, the insured population has grown in Leeds to 186,000 individuals, and there are to-day in that city no less than 23,000 more insured persons in the labour market than there were in June, 1929. I cannot understand why Labour Members do not cheer these statements.

Mr. Lawson: We do not cheer, because there are 100,000 fewer miners at work.

Mr. Adams: I agree that in certain areas not nearly enough has been done to alleviate unemployment. But, surely, it is some concern of the hon. Member and his friends that there has been this amazing and unprecedented improvement in many of the great areas of industry in the country, and I cannot understand why they do not show any satisfaction at that fact. And let me tell the hon. Member that this improvement over the last five years has nothing to do with "war spending." The great bulk of this improvement, certainly in the City of Leeds, has been achieved with very little expenditure upon rearmament at all. The rearmament programme has hardly touched many of the great areas of industry in the West Riding, and, like a hundred other centres in the country, Leeds has gone, without any artificial assistance from the rearmament programme, from strength to strength. There is to-day in that city precisely that shortage of certain types of labour which, with some temerity, I predicted in 1931 before crowded and incredulous audiences.
The Budget is the political basis of our industrial life. The Chancellor of the Exchequer's six years of office have shown a steady progression. Well might my right hon. Friend, looking round on some of his less stationary colleagues, adapt a war-time song:
I have laid more eggs than any chicken on the farm.
I hope that my right hon. Friend in any office which may lie before him in the future will have as illustrious a career as has been his reign at the Exchequer. I hope also that he will stick to the National Defence Contribution. It seems to me as sound in principle as it is ingenious in design. Rearmament should not be regarded as a pleasant opportunity for a general share-out at the expense of some vague, undefined, patient and invisible entities. I am quite sure there might otherwise be a danger that a vast rearmament expenditure would lead to that state of mind. But I cannot for my part understand why the figure for a full year has been put so low as £20,000,000. When we recall the mountainous sums raised by the old Excess Profits Duty I feel that this estimate is extraordinarily low.
On this National Defence Contribution there are two criticisms which seem to me to be mutually destructive. On one hand one has heard in the most surprising quarters a widespread willingness that profits on arms manufacture should be taxed, and yet from the same quarters comes the cry, which I have always felt to be a quite erroneous cry—"You cannot define armaments." You can. For one thing it has been exhaustively defined by Statute in the Arms Export Prohibition Order. Whenever this country or this Government wish to define the effective arms of another country, they know perfectly well exactly what arms are. They knew, for example, at the end of the last War what instruments in Germany's hands were arms, and I should like to see, for my own part, a far closer Government control of the last stages of the manufacture of completed arms. I should also like to see the Arms Export Prohibition Order so rigidly applied that the export of arms would be the exception rather than the rule. No doubt the artificial activity, due to the rearmament programme upon which we are embarked, will spread far beyond armament firms; and here is a way to bring home to the

people that the world would be a richer and saner place if the nations observed Article 8 of the Covenant of the League a little more faithfully than they have hitherto.
This tax, this impost, is comparatively easy to apply, but I foresee, whatever may be the complexion of the Government when the rearmament programme is finished and the expenditure upon armaments sinks to some new average level, great difficulties about its removal. I believe that we are much nearer the possibility of that removal than many think. What we are now doing as a nation is to prove to aggressive States that they cannot outbuild on land, at sea or in the air, this great and powerful nation. This mighty community, of which this House is the pivot and the heart, has nearly reached a stage when it is ready to stand with others in their path. So I believe that disillusionment among dictators will bring about a general limitation of arms. The Chancellor of the Exchequer when he opened his Budget said that the whole of our national finances are going to be dominated for the next few years by the vast and necessary expenditure on armaments. That is true, but I do not think the Government can be accused to-day of engaging in any kind of armaments race. It differs from the kind of armaments race which was prevailing up to the Great War, in this respect, that what is going on in Germany to-day cannot go on indefinitely.
What is happening there is going to result in one of three things. First, it may be an internal collapse of Germany's domestic economy. Or, it may be some collision with a neighbour, in which case I am afraid that we in this country should be inevitably involved. Thirdly—and I think it is the most probable contingency—there is a possibility of agreement for a general limitation of armaments, and consequently a lightening of our burdens here in Great Britain. For that reason I do not think that the rearmament programme, which is the whole basis of our Budget expenditure this year, can be criticised as being in any ordinary sense a participation in an armaments race. If the third and happy possibility becomes apparent I hope the Government will seize any such fruitful opportunity. We have heard many criticisms about the


National Defence Contribution, but the Chancellor of the Exchequer, who I hope will stand firm on the matter, can hardly expect the commercial community to greet the new tax with a whoop of delight. But he will be sustained by the great, powerful and numerous middle-classes in which I am happy to include myself. They will always respect a Government which prefers the sane to the spectacular, and succeeds in uniting practice with principle.

7.28 p.m.

Mr. Price: There are two points in connection with the Budget to which I should like to refer. First of all, let me say something about the incidence and effect of indirect taxation. May I call the attention of the Committee to the fact that indirect taxation has been giving an increased yield for several years past, and that as a source of revenue it has become one of the most important sheet-anchors of the Chancellor of the Exchequer's finance during his term of office. Certain hon. Members opposite, however—I am referring particularly to the speech of the hon. Member for South Kensington (Sir W. Davison)—have bemoaned the effect of direct taxation on the Income Tax payer. Let me give one or two facts which will show that the direct taxpayer has not been so heavily burdened as hon. Members would suggest, and to show that the greater part, in fact almost the whole of the increase of social services since the year 1913, have been financed by the increase in indirect taxation. Since 1913 the amount raised by indirect taxation has increased by £245,000,000. If we assume, as we have a right to assume, that four-fifths of this is borne by the wage-earners and small business men, it is reasonable also to assume that this increase has very largely financed the increase in our social services. Since 1913 the cost of social services has risen by £180,000,000.

It being Half-past Seven of the Clock, and there being Private Business set down by direction of The CHAIRMAN OF WAYS AND MEANS under Standing Order No. 6, further Proceeding was postponed, without Question put.

Orders of the Day — PRIVATE BUSINESS.

LONDON PASSENGER TRANSPORT BOARD BILL (By Order).

Consideration, as amended, deferred till Monday next, at Half-past Seven of the Clock.

Orders of the Day — WAYS AND MEANS.

Considered in Committee.

[Captain BOURNE in the Chair.]

AMENDMENT OF LAW.

Postponed Proceeding resumed on Question,
That it is expedient to amend the law relating to the National Debt, Customs and Inland Revenue (including Excise), and to make further provision in connection with finance.

7.31 p.m.

Mr. Price: I was referring to the increase in the cost of the social services, since 1931, of £180,000,000. In view of the fact that the increase in indirect taxation since that time has amounted to £195,000,000, it is reasonable to assume that those who mainly bear the cost of indirect taxation are worse off by £15,000,000. While it is true that direct taxation increased since 1913 by over £300,000,000, one has to remember that in spite of the decrease in the cost of interest and management in connection with the National Debt, due to conversion, that cost still amounts to over 200,000,000. It comes to this, therefore, that, to a very large extent, the money which is paid in direct taxation goes, at least as to two-thirds, in the interest and management expenses connected with the National Debt. When we take into account also the new and increasing burden of armaments, we find that these heads of expenditure, namely, armaments and interest on and management of the National Debt, roughly cover the contribution of the direct taxpayer, meaning that the direct taxpayer finds little or nothing for the social services.
It has been claimed that this indirect taxation has resulted in an improvement in trade and a general revival. I am not one of those who take the view that all forms of interference with the foreign trade of the country are undesirable. Probably in 1931 when there was a general deflation of prices and when this country was being made a dumping-ground for surpluses from outside, there


was a case for some form of insulation of our economy. Unfortunately, under our present economic system, in which private capitalist interests are so powerful, when that kind of restriction is introduced and when there is a Government which is favourable to those interests, then State interference in. the form of tariffs and quotas and in other forms, is liable to be retained longer than is desirable. As I say, there was a case in 1931 for some form of insulation while world deflation was going on and prices were collapsing, but that phase has passed and we have entered a phase of world inflation and rising prices. I maintain that the time has come to liquidate those restrictions, to lower tariffs and to do away with quotas. Indeed, that time came two or three years ago, but unfortunately the Government, subservient as it is to private industrial interests, finds it very hard to move in that direction.
Moreover, it is claimed that the trade of the country, and particularly the export trade, has been assisted by the introduction of these indirect taxes, and notably by those negotiated at the Ottawa Conference in 1932. I have been at some trouble to look up the facts concerning this matter, and I find that there was a steady increase in both exports and imports between this country and the Dominions and Colonies before the Ottawa Conference took place. Between 1931 and 1932 there was an increase of imports of 4.4 per cent. and an increase of exports of 3.5 per cent. Between 1932 and 1935, after the conference the increase in imports was 3.5 per cent. and in exports 5.5 per cent.
My point is that the important thing in trade was that we had left the Gold Standard in 1931. That was the important factor and not the Ottawa Agreements and to prove that, I would point out, that during all this time when our export trade was improving, after we had left the Gold Standard, it was going down with the countries which remained on the Gold Standard, such as France, Holland and Belgium. That tendency continued until those countries themselves did the wise thing and went off the Gold Standard—what this party was turned out of office for wanting to do and not doing. Once they went off the Gold Standard, our trade with them began to increase, but in the cases of France, Holland, Belgium and Switzerland our imports from

those countries fell between 1931 and 1935 by from 14 per cent. to 8 per cent. I think too much has been made of the Ottawa Agreements by hon. Members opposite. The thing to be considered is the management of our currency system, in its relation to the currencies of other countries and their relation to gold.
The Ottawa Agreements, if anything, were a disturbing factor. They introduced a jarring political note into the international situation and, to some extent, poisoned the international atmosphere. It is also to be remembered that many of our Dominions are now developing in such a way that they are not so complementary to us as they used to be. It was always thought that Canada would supply us with food and that we would supply Canada with manufactures, but to-day Canada is becoming increasingly a manufacturing country, while we are tending to develop our agriculture. The point which we need to stress is this. If the Ottawa Agreements have initiated a low tariff arrangement between this country and the Dominions, what is there to prevent an extension of, that principle outside the Empire, and the inclusion of other countries? Why not include United States? Already Canada is taking steps in that direction. She has made an agreement with the Administration in Washington and she has also, I believe, made an agreement with Poland.
What I wish the Government to look to is not the continuance of these indirect taxes with a view to keeping the Empire a closed entity and the use of these taxes as a sheet-anchor of national finance, but their use for the purpose of expanding the low tariff area in the world, and taking the first practical steps towards the lowering of international barriers to trade. Economists tell us that every eight or ten years there is the danger of boom and depression. There seems to be an automatic tendency in that way, but it is noticeable that human agencies are capable of postponing or accelerating that process and preventing the boom rising to its highest peak and preventing the depression from reaching its lowest depths. I submit that it is possible for the Government to take steps to prevent the collapse which some people expect to happen in a few years time. One of the most important things done recently for the assistance of international trade has


been the conclusion of the tripartite agreement between this country, the United States and France in regard to the stabilisation of the currencies of the three countries.
The seriousness of this aspect of the question is shown by the fact that a few weeks ago when the rumour got about that President Roosevelt was going to increase the gold content of the dollar and revalue the United States currency, without considering the effects outside the United States, there was immediately a panic on the stock exchanges here and in some other countries. In order to prevent that kind of thing, an extension of the currency agreement should be made to bring in any other countries who are ready to come in, in order that we may have stabilisation without the fear of any upset and make it easier to negotiate low tariff agreements throughout the world.
There is one other aspect of this Budget which will be much discussed, namely, the National Defence Contribution. For my part I welcome the new form of taxation which the Chancellor has introduced. I do not like to commit myself on details, and I realise that there are many difficulties in the way, but I feel that it is time that we introduced some more scientific and, if necessary, discriminatory form of taxation. What I mean is, that during the time of deflation when prices are going down, fixed-interest security holders do well and that was going on all through 1929, 1930 and for four or five years earlier. The holders of Government bonds and fixed-interest securities had then a bigger share of the national income than those who were holding industrial equities, but now the situation is reversed. In those days there was a strong case for asking for some special contribution from the fixed-interest bearing security holders. And that was finally taken in the form of a conversion. A Conversion Loan was issued and the rate of interest brought down, and that was the contribution of the fixed-interest bearing security holders. Now the time has come when prices are rising and, having regard to that fact, income of the holders of bonds and fixed-interest securities is less. Their share of the national income has gone down while that of the holders of industrial equities is going up, so that now I say is the

time when some special form of taxation should be introduced such as was introduced during the War. It may be argued that then many mistakes were made and the proper things not done. But I want to see the Chancellor face up to his critics, meet the various criticisms that have been made this afternoon and bring about a workable tax which will make the holders of industrial equities pay towards the cost of rearmament and the national budget generally.
With regard to the fact that profits have been increasing for the last few years, I think the time is more than ripe. There are figures I have seen published showing that for the four quarters of 1935 and 1936 there have been increases of profit—in the first quarter of 1936 over the first quarter of 1935 by 13 per cent.; in the second quarter to 10 per cent.; in the third quarter, 14 per cent.; and in the fourth quarter, 15 per cent. over the previous year. I think that that is in itself a sufficient indication that the holders of industrial equities are doing relatively well. Moreover, may I point out that the rise in profits is greater in those industries which are dealing with commodities, and just in those sorts of things which are the raw materials of the armament industry, and for that reason I think there is abundant reason to take steps in this direction. I know it is difficult, but of course all industries must come under this. It is very difficult to separate armaments out especially for a tax of this kind. It cannot be done, but that is not my main contention. It should be possible to put some other tax as was recommended by the Commission on arms recently—some special contributions on the armaments firms alone—but this new taxation will not be only on armament firms, but on all industrial equities which are doing well under rising prices, and if prices cease to rise, their profits will not rise, and consequently the tax will not be operative. I know there are many objections by several speakers, and what we must especially watch against, what the Chancellor must especially watch out against, is what happened during the War: Firms put their profits away, they hid them in various reserves by building construction of all kinds. I know of cases of that kind happening at the time, and I know it may happen again.
May I put one question which concerns agriculturists? I do not think that many


agriculturists under the present situation of the industry are likely to come in under this National Defence Contribution. [An HON. MEMBER: "With a subsidy."] Not even with a subsidy. But there may be some exceptions and, I would like to know this: For assessment of Income Tax farmers can either pay by submitting accounts under Schedule D, or, if they do not, they are assessed under Schedule B—the assessment is made for them. If they are likely to come in under this tax, will they have the assessment put on them by Schedule B if they fail to submit accounts under Schedule D? That has been put to me, and it is causing a certain amount of concern among farmers that this might possibly be done. For my part I think it will be an additional reason why as many as possible should submit accounts, but naturally they are afraid of, or at least they would like to know under what conditions an assessment is likely to be made, and I am putting that forward for them to know the facts.
I would say finally, as I said at the beginning, that I wish success to this new form of tax, because I believe it will introduce a scientific element into our taxation system. It will discriminate to some extent, and it will make a difference—it will show that the Treasury realise that taxation must vary according to whether prices are rising or falling, as to whether we are in a period of inflation or a period of deflation, and, in the long run, it will tend to even-up booms and depressions, making them less severe, because it is they that have been such a cause of serious economic and social dislocation in the course of so many decades.

7.51 p.m.

Mr. Chorlton: I do not want to waste words on any general financial disquisition, but I would like to say first that the difficulties of this particular tax which have been dealt with by other hon. Members, the National Defence Contribution tax, is that its incidence may bear no relation to armaments at all; there will be more industry affected outside than in. That is really the hardest nut we have to crack. The large expenditure is, of course, primarily on armaments, and the impression has got about that heavy profits are being made on these contracts, and therefore the right way to meet such expenditure is by taxing the particular

armament firms, wherever they are, but the proportion of trade affected quite outside armament work is actually greater and too severe regulations may be repressive.
The Chancellor has the most difficult job of trying to relieve firms which are in no way concerned with armament production, and in many cases are injured by it—the job of giving them some form of relief which will not affect their progress; because, after all, what we want is to continue the progress of industry. The happiness of everybody in the country is bound up with this, not only of the master but of the man, for I refuse to believe all the tales that the master tries to take too much and drives the men to get too little. That is not my experience of industry in the various firms with which I have been associated; I am thankful to say that we have worked together.
One of the first industries which is not concerned with armaments in the main and has been through a terrible depression is the cotton industry, and it is going to be affected unless something is done. I would ask the Financial Secretary in his reply to make particular reference to the cotton trade. Here is a trade that year after year did so badly that the number of mills actively engaged in it became less and less. The output of the trade fell from 7,000,000,000 yards to 2,000,000,000, less than a third, and that represents the way that money was being lost during those years. Now, how are we going to assess such an industry? It is proposed to start with the figure of 6 per cent. profit, but it cannot be that 6 per cent. is an adequate return for an industry which through all these years has been making losses. That seems to be a very important point. The 6 per cent. figure is too low, unless many allowances are made in different ways for losses in the past, as that it becomes a net figure that can be paid to the ordinary shareholders.
The cotton trade comes in amount of employment next to the coal industry, and in export value it is the greatest of all, so that obviously anything that can be done to prevent too heavy' imposition of this tax on this industry is of great importance. I do not think that the trade generally is opposed to the tax; the feeling, I gather, is the fear that it may be so heavy as to destroy initiative and


prevent the increase of production for which we have all been looking. One of the difficulties—dealing not specifically with cotton but with other industries like engineering—is the years of assessment. The year of assessment, if I may make a suggestion, should include 1936. Trade was not beginning to expand until 1936 and one of the years, 1932, was I find really a bad year. In 1936 we had not arrived at anything arising out of armaments; it could not be said that any profits made were armaments profits, and for those firms with no connection with armaments at all, of course that was perfectly clear. I hope that 1936 will be included. It will, I believe, make a considerable difference and ease the minds of those people who are not out to make big profits but do not want to be shut down in their efforts to go ahead.
I support what has been said earlier, that the wider and more complete the explanation that can be given by the Chancellor of the Exchequer in his reply, the better. I know another company in which this industry has been carefully carried on for years by two men. They have run it successfully and by thrifty ways have managed to tide over all difficulties, and now they are doing so well that, because there is such a big demand, they have been actually encouraged to double their output. Where are they going to be, a firm like that? The next point I should like to ask is when the financial year will be taken as ended? Suppose it ends at April or March, will the Chancellor take the full year or, if it is very much earlier or later, will he get a portion of the year? What is the period to be taken? That is rather important. I have dealt with the question of the 6 per cent., the figure allowed, but I would like to add what exactly does the 6 per cent. mean? Is it net after all deductions have been made for whatever reason, or is it a figure that under normal conditions would be reduced by various provisions? If so, it is much too low.
Another question is, will the subsidiary companies be taken in with the main companies or dealt with separately? Then I hope the Chancellor will be explicit about capital value. Does it mean the present value of the assets of a company or of the assets when the company was formed? If they are to be taken on their

present-day value, that means a terriffic job throughout the country. But those who have bought shares in the last couple of years are going to be badly hit if an earlier value is taken. It is the really hard cases to which I am calling attention. I want to do all I can in passing the Budget, so long as the hard cases receive fair and reasonable treatment. Only two days ago a special delegation, led by Lord Derby, made representations to the President of the Board of Trade on behalf of the industry pressing for assistance. Is this now to be caught in a net by this particular tax? This would be a calamity, just as it is recovering after suffering so severely as it has done for so many years.
I want to feel that there will be nothing in this tax to cause any hesitation on the part of small concerns to go ahead. The progress and prosperity of this country depend to a large extent on the small concerns who may be hit by this tax. Men who have suffered in hard times and are beginning to make a little profit are the people to be considered. We want to do everything we can to encourage them in every way to go ahead in their business, and I hope that the necessary regulations under the new proposals will be designed to that end. We want the country to turn out far more in the way of production than ever before.

8.4 p.m.

Mr. McCorquodale: I rise chiefly because this is probably the last Budget that the Chancellor will be presenting. It is fitting that those who have admired his work in the last five or six years should take the opportunity of expressing appreciation and gratitude. Within the last two days I, with other hon. Members, attended one of the largest mass meetings ever held in my constituency, and the remarks which I made there on this subject were received with such applause that I venture to quote them here. I said that history would no doubt acclaim my right hon. Friend to be, because of his achievements, the greatest of modern Chancellors.
Six years ago when he took office our finances were in a parlous condition. Now our credit stands as firm as a rock. Our finances are the envy of the world. He has largely extended our social services and, even in the face of the tremendous demands of our rearmament necessities, we can look forward with confidence to the future.
My constituents also applauded when I said:


I was convinced that our country's safety, honour and welfare could be as safely left in the hands of the right hon. Gentleman the present Chancellor of the Exchequer as our finances have been in the last six years.
I wish to raise one or two points about the Budget which I think have not so far been dealt with. The Chancellor is allowing for a general Supplementary Estimate of £10,000,000. He did not give much explanation about it, and a few more words might be valuable. He cursorily noted that his Miscellaneous Receipts were down £12,000,000. The total of those two items alone is more than he hopes to get in a full year by the new tax, about which everyone is disturbed. Could we have some further explanations? I think the basic idea of the National Defence Contribution is sound and just. Its object may be summed up under three heads: (1) to raise extra revenue out of the additional prosperity that armaments may create; (2) to catch any profiteers that may be hanging about; and (3) most important of all, to put a salutary check on anything approaching an unmanageable boom with its consequent slump.
While the country will whole-heartedly be in support of this basic idea, the method adopted is open to criticism. The tax may be discriminatory not only between industries but between various classes of shareholders in the same industry. There is nothing that annoys a taxpayer so much as the feeling that his neighbour is getting off too lightly while he himself has to bear a full burden. The country needs assuring that the tax is going to work fairly as between individual and individual and between firm and firm. I am tempted to think that the rate is too high. It is difficult to judge what the tax will mean and I do not think that even the Chancellor can estimate that. I think that 33⅓ per cent. is too high for a start. Possibly a rate of 10 per cent. rising to 15 per cent. would make the tax much more popular in the country and yield sufficient revenue. Regarding the years to be taken as a basis for standard profit, many firms may have experienced during one of those three years an abnormal increase or decrease in profits. It is surely unfair that such a period should be taken as a standard basis of profit for all time. I suggest that firms should be allowed to choose two consecutive years out of a period of three or four. I hope that whoever is Chan-

cellor when we get our teeth into the Finance Bill will listen to suggestions and Amendments in the direction of making this tax both equitable and effective. If that can be achieved, this tax will be well received throughout the country.
One other point—I am rather nervous of speaking on this matter as I am not an expert in currency, but I am one of those who dislike anything hidden in the way of business. I dislike hidden reserves; I dislike hidden profits or losses. I am in favour of everything being open to inspection. The right hon. Gentleman the Member for Hillhead (Sir R. Horne) urged some form of stabilisation of currency. It seems to me that sooner or later—sooner possibly rather than later—that stabilisation will become not only necessary but easily accomplished. When that comes about and if the value of gold is anything like it is to-day, there will be a very large profit in the Treasury and in the Exchange Equalisation Fund, which holds gold at present at the old value of 84s. an oz. as against 140s. as it is to-day. That is a hidden profit. I have no idea how much it is. Perhaps it is over £100,000,000. But it is not only a hidden profit; it is a capital profit. It is a capital appreciation, and I do not wish to see some future Government—possibly of a different complexion from the present one—taking that profit and using it for income purposes. That would be the worst finance possible. I should welcome a statement as to how much profit there is in that Fund or how much there would be if gold were stabilised at the present price. If in the near future the currency is stabilised, I would like to see that profit used to help reduce the loan for National Defence.

8.13 p.m.

Mr. David Adams: It is clear from the Budget statement and the subsequent debate that the Chancellor's double motives are likely to be achieved. They appear to be (1) to obtain new money, and (2) to arrest the speculative boom that was upon us. The fears of members and supporters of the Government, who in this House are primarily representatives of money, indicated that the first obpect had been achieved, and the fall in speculative securities on the Stock Exchange since the Budget statement, amounting to £400,000,000, indicates that speculation has received a most severe check. The fall is said to be greater than


has occurred in the history of the Stock Exchange in the particular shares concerned. When we are advised, moreover, by the financial newspapers that such stocks—armament shares and engineering shares affected by armaments, and others—can be looked upon so far as speculative purposes are concerned, as nearly equal to gilt-edged securities, then we realise that the Chancellor has undoubtedly arrested the boom. I wonder what would have happened if a Socialist Government had been in office and had originated this form of taxation. I fancy the military might have been called out the next day. The fact that the Chancellor is present causes me to say that his Budget, which we are sorry is likely to be his last one, has produced on these benches a sense of fraternal relationship with him, and if at any time he may deem it judicious to change his location, we assure him of a cordial welcome on this side, for semi-Socialists or Socialistically-tinged Budgets of this character are not to be obtained from the Conservative party very often. It is a pleasure to be able to express satisfaction with the courage, the daring and the originality of the Budget statement, and to say that the method of its presentation was ideal, admirable and one which I am certain gave very general satisfaction.
As far as the material of the Budget is concerned, to one who always most ardently looks for unanimity in the House, as I do, it was lamentable that the substance of the statement did not obtain the equally unanimous approval of the House. I suppose the Chancellor could scarcely have expected that, since it would naturally take a longer time for the blessings and advantages of the Budget to be absorbed on his side of the House, which is so Conservative as to be rather slow in absorbing good ideas, as compared with hon. Members on this side of the House who have always looked for the new and perhaps the revolutionary. The Chancellor could hardly have expected it. I am reminded of the young Irish farmer who had just sold some pigs on Dublin market and was asked by one of his friends how he did, and replied, "I did not do as well as I expected I would, and I did not expect that I would." It is a sound canon of taxation that taxation should press equitably upon all classes, and it is to the credit of the

Chancellor that he has not proposed any increase in indirect taxation. The classes most affected, suffering as they are from rises in prices, many of which have been organised by the Government, are not to be pressed still further under the Budget.
The cost of living rose from 144 on 1st April, 1936, to 151 on 1st April of this year, an increase of seven points, and since that time it has gone up by 12 points, making an increase of 8½ per cent., or is. 8d. in the £. I believe that in days to come Chancellors of the Exchequer will cast their eyes in that direction and see whether it is not in the general interest of the community that the depressed classes should have some consideration at their hands. The fixed-income people, the pensioners, the unemployed, those under the means test and their dependants, and people with small incomes, are paying in the increased cost of living a very substantial contribution to the finances of the State. It has been estimated that this amounts to not less than £20,000,000 or £30,000,000 annually.
Of course, the Government always have the Import Duties at their disposal as a standby, and it is significant that almost none of these Import Duties, which add to the burden of indirect taxation, has been met with protests from the Government side of the House. Yet, each of these increases has been not only art addition to the burden on those classes in this country, but an addition to the general unrest in the countries of the world, There is little doubt that our fiscal policy has contributed, and is contributing, not a little to the difficulties of the world in general and perhaps to the creation of the "boom" in armaments which now, alas, is almost universal. I hope that the result of the increase in the cost of living will not be to create undue industrial unrest, which nobody wants, but I believe that unless the problem is taken in hand, we shall, if these increases continue, he faced with substantial unrest during the ensuing months of this year.
As to the National Defence Contribution, it is a form of levy which, in my judgment, and probably in that of the Chancellor, has come to stay. As in the case of Income Tax, it is begun as a temporary expedient. It meets, in part, the demand on this side of the House for the taxation of the beneficiaries of the armaments expenditure, but it is not restricted, as has been pointed out, to those engaged


in arms manufacture. I am certain that this form of taxation will be incorporated into the normal taxation methods of the country in the days that are to come. No doubt, when arms production in this country is over, we shall be confronted with depressed industries, and it is then that subsidies will once more begin to be paid. If subsidies can be justified for the adequate maintenance of industry in various forms, hon. Members on this side of the House are not opposed to them, provided there is adequate supervision or control over or interest in all such subsidies. We shall find that even Conservative Governments will automatically, and almost in the nature of things, when granting subsidies, consider it their incontestable right to take part of the proceeds of industry and share in the profits under the scheme which the Chancellor has introduced.
With regard to some of the effects of this Defence Contribution, we on this side of the House are just as interested, although we may not express it, in the prosperity of industries as is the other side, because we recognise that with general prosperity the worker has an opportunity of obtaining a better share in the produce of industry. Moreover, if one looks far enough ahead to the days when nationalisation is to come—if not in the next Parliament, it will certainly be in the ensuing one—we want industry to be in a flourishing condition when it is absorbed by the State. We are, therefore, genuinely interested on this side of the House in the prosperity of the business concerns of the country.
The years 1933–4–5 were very lean years, and the standard in many cases will be low; accordingly, many companies will be prejudicially affected as against others if these years are taken. Many cases have been quoted in which there will be manifest injustices unless meticulous care is taken in the determination of what is the proper capital standard or the proper dividend standard for individual concerns. I know the principals of a certain engineering firm on the North-East coast which is making goods principally for export. At the desire of the Government they began to manufacture armaments, which necessitated new building operations and new machinery, but above all, the chairman of directors informed me, they had to abandon their

export trade. What is to happen to that concern at the end of the arms production period? They will be left, presumably, to maintain new works and machinery which are of no use to them. They will require very large resources, I am advised, to recover export trade. Large revenues are required to meet their various obligations due to their patriotic—and that is the correct word in their case—determination to assist in arms production. Is that firm to be penalised by the new profits tax which may in their case amount to 33⅓ per cent. deduction from the standard amount? If that be so, I am sure that if it ever should occur again that firms are required on patriotic or any other grounds to turn to armaments making, they will hesitate to do so in the interests of the solvency of their concerns.
Coming from a Special Area I am wondering what the Chancellor is about to do with us. The industrial position in the Special Areas, which is largely due to lack of foresight and planning, has caused a confusing situation. Several firms and businesses are there or will shortly be there. The first type are those which have financed themselves and are proceeding along normal lines. The second type alongside them have been financed through the aid of the Special Areas Reconstruction Association. Their capital has been obtained only at high rates of interest, and it has to be repaid in a maximum of five years. These concerns have to pay full rates, taxes and rentals, so that they will certainly need some merciful consideration. The third type are those which will have advantage of the Treasury £2,000,000. They may obtain, through advisory committees which have been set up, relief for five years of Income Tax, rates and rent. They are working alongside competitive firms which will thus be in a prejudiced position. The fourth type are those which have obtained recently—I know some cases this week—loans under favourable conditions and easy terms of repayment from the Nuffield Trust. The existence of these various types creates a situation which will take a Chancellor's mind to deal with equitably, and I mention them in order that equitable treatment may be meted out. There must be adjustments of a radical character or grave injustices will be done. I fear that


the enterprise of particular concerns that I know on the North-East coast will undoubtedly be crippled.
Take the case of two firms which are both engaged in the same enterprise. One has displayed liveliness and competence, has written down its capital and modernised its plant. In order to do so it has sold its investments, and it thus has begun with a low capital standard and a low dividend standard. The other firm, however, is working with inflated capital. It has not written down its capital and has a high capital standard. It has paid out its resources in large dividends and is therefore in an altogether more privileged position so far as the new tax is concerned than the wise energetic firm that has done its duty by the State. With regard to the question of investments outside a firm's own business, I know that in the case of certain shipping companies such investments are the only source of return to the shareholders. If those are not to be taken into account, undoubtedly such companies will begin with low dividend standards. The Chancellor, we learn with regret, is about to make his exit for a more exalted station. What better advice can we give to him than was given by the hon. Member for Oxford University (Sir A. Salter) in his luminous address, which was exalting to the House of Commons, to which his presence has added a new lustre and dignity? It was an injunction to the present and to the succeeding Prime Minister to labour without ceasing in the direction of expanding not only British trade but world trade in the general interests of civilisation.

8.36 p.m.

Mr. George Balfour: As hon. Members know, in recent years I have addressed the House only on rare occasions, and, if my memory serves me aright, on those occasions I have usually been in the position either of a critic or an opponent of the Government Measure or Resolution before the House. On this occasion I am happy to say that I find myself in agreement with the general proposals submitted by the Chancellor of the Exchequer. As an industrialist I should say that under normal conditions his new proposals were quite unjustifiable, but in the circumstances in which

we find ourselves I think they are prudent and wise as a precaution to help us to restore normal conditions after the present abnormal conditions have passed. As an industrialist I feel also that it is right because of the abnormality that this special Defence expenditure is superimposing upon normal trade conditions and the normal armaments' expenditure such a huge expenditure as to create additional profits beyond anything which we could regard as normal. It is right, therefore, that for the limited period of years which the Chancellor has indicated we should make a special industrial contribution to this Defence programme, detached entirely from the general taxation of the country and dissociated, as it has been submitted to us, from Income Tax.
On these grounds I have no hesitation whatever in saying that the Chancellor has submitted broadly a sound Budget to the House, but I am sure he will not misunderstand me when I say that regard ought to be had to certain cases, no cases, as far as I can gather, with which I shall find myself associated. There must be a large number of cases in which companies can be related neither to the three years' average of profits nor, in any reasonable or sensible degree, to the 6 per cent. allowance, and I think the Chancellor will find it necessary to provide some machinery which will do neither more nor less than relate those special cases reasonably to his intentions in those alternatives scales. I realise that in framing these proposals the Chancellor has endeavoured, as far as is possible in a preliminary proposal, to meet the reasonable views of industry, but careful consideration will be needed in the framing of the law if he is to equate fairly the profits in a large number of concerns which could not properly be brought within the ambit of those two provisions.

Mr. Kelly: Could the hon. Member indicate one or two of such cases—one, at any rate?

Mr. Balfour: There must be such cases as those of plantation companies with a capital written down to a mere cypher and with, possibly, their assets not capable of easy recognition to the satisfaction of the authorities administering the law. There must be many such companies about which I could give examples if I were associated with or in-


terested in such companies; but I am putting forward this plea solely on the grounds of fair and honest public policy, and in the hope that some arrangement will be made which will give these people the same relative allowances as other companies whose accounts disclose their proper and true position. Further, I suggest to the Chancellor that he would not only find it more convenient to himself but more acceptable to industry, if the flat rate of 6 per cent. were applied to the capital as represented by the assets of a company, without worrying about first deducting debenture interest or loan interest. It would make no difference financially to the result, and we should be dealing with a straightforward 6 per cent. In some cases companies have 7 per cent. debentures and in other cases 5 per cent. debentures, but if it is all put in the pot we shall find that industry as a whole will neither gain nor lose and the Exchequer will neither gain nor lose. It will be much easier for his staff to deal with a straight 6 per cent. on the accredited capital, whether represented by loan or share capital or debenture capital. I suggest that in the hope that it may be of assistance to industry and I do not think it will reduce the receipts by one penny. I do not feel that I can usefully add anything more, as I am sure that nearly every aspect of this National Defence Contribution has been raised in the speeches from one side of the Committee or the other, but I commend what I have said to the attention of the Chancellor, because I am sure that the adoption of the suggestion would remove a great amount of irritation, and be well worth any time given to it.

8.43 p.m.

Mr. Stephen: The present Chancellor of the Exchequer has been a very lucky Chancellor. It is true that he took charge of the finances of the country in a period of depression, but there was the very genuine excuse that that depression was a world phenomenon, and that no Government could be held responsible for the depression in this country. Now the Chancellor is in a much more fortunate position, because there has been a revival of trade and industry, and throughout the Debate he has been congratulated because, it is said, it was due to his wise guidance in the financial

affairs of the country that we have advanced from slump to prosperity. [HON. MEMBERS: "Hear, hear!"] Hon. Members say: "Hear, hear!" I would remind them that the same phenomenon has occurred in other countries, an improvement in trade and industry and a fall in the number of people unemployed. I suppose that, in some mysterious way, at this epoch in the world's history, each of those countries has been gifted with a wise Chancellor to conduct its affairs.
I do not think that the Chancellor and his policy have had very much to do with the revival of prosperity in this country. I do not want him to think that I say that in any grudging spirit or in any disrespectful way. Probably he has done his job as well as any capitalist-minded Chancellor could have done it in any country. He has been very largely the creature of economic circumstances. Responsibility was disclaimed by Chancellors, Governments, and parties previously and responsibility has now, in the same way, been due to economic forces and to the way in which the world economic system works. I remember when the Chancellor spoke last year. Generally he appears to be a very sober, steady and pessimistic person; anyone who wished to characterise the kind of Budget that might be expected from him would think of a general undertaker's Budget, because of the Chancellor's gloomy manner. Last year he spoke about the buoyancy of the Revenue, and he took a somewhat buoyant view of matters. The present Budget is influenced most of all by the international situation and its difficulties, and by the tremendous increases in expenditure upon armaments. The armament programme has to be provided for and, in framing his proposals this year, the Chancellor has in consequence had a difficult financial problem. I am not disposed to say that he has acted unwisely in the proposals that he has made; I am not even going to get very indignant about the way in which he is throwing much of the burden of expenditure on to loans and to a future date.
It is remarkable that this Committee can contemplate so calmly the tremendous expenditure needed for financing a programme of rearmament which will cost £1,500,000,000. The equanimity with which hon. Members regard it is extra-


ordinary, when one remembers their response to the demands which have been made in the past for increased expenditure upon the social services in order to mitigate poverty among the mass of the people. We were told that that was impossible, and Members like myself seemed to be regarded as living under the influence of the silly idea that there was a large amount of money which could be drawn upon; whereas, the amount of money that could be provided was very limited. The extraordinary phenomenon in this and other countries, which is typified by our armament expenditure, does not seem to suggest that the bankruptcy court is facing us to-morrow. It is expenditure upon the instruments of death, but when a few hundred million pounds of expenditure was proposed for life, we were told lurid stories about the bankruptcy court and how everything that we proposed was all wrong.
It is evident that we have an un-balanced Budget. Hon. Members on the Government side of the House traced the pitiful conditions of 1931 to the unbalanced Budget, but now that we are launching, not an expenditure of a few hundred million pounds for the unemployed, but £1,500,000,000 for the instruments of death, those hon. Members are uttering practically no note of warning with regard to that expenditure. If this rearmament programme can be financed there should go with it a corresponding programme of amelioration of the conditions of the people. For every pound spent upon rearmament, a pound should be spent upon the social services. I was interested in what was said by the hon. Member for Oxford University (Sir A. Salter) and in his argument that much of the expenditure upon social services is paid for by the poorer sections of the community. I agree with him that our people do not seem to realise how great a portion of the revenue from indirect taxation is drawn from the working class and constitutes in many ways a most unfair system of taxation.
The Budget reflects the general economic conditions of the country and the state of trade and industry. The revival in trade and industry has been beneficial to the working class because many who have been unemployed for a long time have found employment. One

is willing to admit that, but the improvement in the condition of the working class and the greater amount of security of employment to-day are in no way commensurate with what the employing class have obtained from that revival of trade and industry. After all, the working class are still on the poverty basis, or very near to it. The hon. Member opposite need not shake his head. Anyone who knows working-class conditions in this country knows that the working class are living either in poverty or on the edge of poverty. In the Budget proposals there is no attempt whatsoever to give anything like equality of treatment, or so to organise the financial system of the country that the great mass of the people will enjoy their full share in the revival of trade or industry.
If I may give an illustration, I will take it from the great works on the edge of my own constituency, the Parkhead Forge. It was only a few years ago that the Bank of England had to put in its financial bailiffs in connection with that concern, because it was in such a bad way; it was at a very low level indeed. To-day, with the rearmament programme and this expenditure for which the Chancellor is making provision, thousands more people are employed there, the work is booming; and there is this singular feature, that the work which kept the Forge going during the period of depression has now been practically closed down. One of my own constituents who worked there had been working for years one week on and one week off. Now he is out altogether, and he tells me that the kind of work he was doing has been closed down. But there is the big rearmament programme, and the Parkhead Forge is now in a very sound condition as an industrial concern. Money is being made again at the Parkhead Forge. And yet in these circumstances the engineers, the highly skilled men employed there, are refused a penny an hour on their wages. This firm that has come from bankruptcy to affluence is not able to provide an additional penny an hour for those highly skilled workers, who, the Minister for the Co-ordination of Defence has said, are among the most important people in this country. It is just the same throughout the rest of industry in the country.
The trade union executive leaders are face to face with the possibility of un-


official strikes, because the workers in those factories, under the present conduct of the finances of the country, are not getting anything like their fair share in connection with the revival of prosperity in this country. Unofficial strikes do not happen because there is some extra dose of original sin in the working class; they happen because the economic circumstances are practically compelling the people to take the action of walking out. Nobody likes to take the risk and bear the sacrifice and hardship involved in leaving his job. I believe it is a sound criticism of the Chancellor's financial proposals to say that there seems to be no vision in regard to the fair treatment of the workers in connection with this great new expenditure for which the Budget is making provision.
These are the more indirect consequences of the Budget proposals, but I would also like to point out that, while there is this scheme for expenditure on armaments, there is no scheme for the development of social services. There is the grave problem of the Special Areas. Some of them are offered, possibly, a small-arms factory here and there, but that is all that there is in the outlook of the Chancellor of the Exchequer with regard to the Special Areas. All that is proposed is about as poky and miserable as what one might associate with the per- son most concerned in that connection—the Minister of Labour. The social services have come through this period of depression, but in many of them during those years one anomaly has been exposed after another. For example, there are hundreds of thousands of widows who have been denied pensions, although their circumstances are just as needful as any of those who are in receipt of pensions. All those widows have been cut out of the pension scheme, many of them in the most anomalous positions, and there is nothing in the Chancellor's proposals to remedy the circumstances of these poor people in this time of reviving trade and industry. There are the old people, and, with the expansion of prices to-day, it is only reasonable that the old people should be looking for an advance in the amount of their pension in order to allow them to keep the wolf from the door; but again there is nothing in the way of increase of pensions, nothing to bring hope to those poor people. During the year the Chancellor has had pre-

sented to him the unfair treatment which single women are receiving under the present operation of National Health Insurance; the demand has been made for a pension scheme for spinsters; but again there is nothing doing. No money can be found; it would cost so many millions of pounds a year—not as much as the cost of another "Hood." There is nothing in the Budget for that, nothing in the way of improvement of the social services. In consequence, I think that the working class in this country will come out strongly in revolt against the financial provisions for the year.
The big point of controversy which has arisen so far has been the new National Defence Contribution. I listened with great interest to the speech of the hon. Member for North Tottenham (Mr. Morrison), who was pleading the case of someone with £17,000 or £18,000 which he had put into a certain business and how he would be affected by the new tax. I do not know for what party the hon. Gentleman was speaking, but on the seat on which I sit there were very many Tory expressions of approval. It reminded me very much of the speeches that used to be made by Conservative Members who told us that the Labour party never realised the number of poor widows who had been left by their husbands a few thousand pounds invested in railway or coal companies and how we were not really taking any account of what our policy would mean to these people. When I hear Conservative speeches on this new tax I think how wise a Conservative the Chancellor of the Exchequer is compared with his supporters who are in revolt against this proposal. He is proposing to let off the people who are going to profiteer at the expense of the community in connection with rearmament with a tax of a fifth. The working classes are intelligent people. They read the financial columns of the newspapers, and they see the way in which one share after another is soaring, and they know how these great profits are being made and will be made in the future in the armament industry and ancillary industries. The working people, as they see prices rising and find that the employers will not give them a penny an hour increase in wages, are not going to take it calmly. The Chancellor has every justification. He says that if extra profits are to be made in this way they shall


form a source which shall make the national contribution to the defence of the country.
I do not think the working class are going to be so foolish as to be taken in by this controversy which is creating a certain amount of stir in the Conservative party. The fight is not between different sections of the Conservative party whether it shall be this tax, or this tax modified. The fight in the future over the expenditure with which the Budget is dealing is a fight between the working class and the owning class, who are not prepared, even with their wealth, to take the burden upon them of providing for the Defence of the country. The amount that is being taken from the workers is shocking. The indirect taxation is a tremendous reproach to the possessing class, and yet, with this burden upon the shoulders of the working class, they are not only being called upon to pay all these additional millions for Defence, but they are afterwards going to be asked to give their lives. I remember that in the last War there was a beautiful poster in Scotland showing one of our Highland glens and above it the words, "Is this worth fighting for?" The workers of Scotland were expected to look at that picture of a beautiful spot in their own country and rally to the Forces. I would have had no objection to their rallying in their thousands and their tens of thousands to fight for it, but they were rallying to fight not for it, but for the owners of it. I am told that this is the last Budget of the present Chancellor and that he is going to get promotion. I hope that in the not distant future the wholt Government will also get the due reward of the policy that is enshrined in this Budget and that the working class will drive them out of office and will take the power to use the wealth of the country to bring health and happiness to all the families in the community.

9.14 p.m.

Sir John Mellor: It is, I presume, a consequence of the secrecy which must necessarily attend the preparation of the Budget that we have not at present very full and definite information with regard to the most novel proposal, the National Defence Contribution. It is owing, I think, mainly to the lack of full and definite information that the business community has been somewhat disturbed.

I have very great faith in the Chancellor of the Exchequer, a faith which is certainly shared by the overwhelming majority of my constituents, and I believe throughout the community. That faith is well grounded upon six years of really sound finance. That being so, I hope and believe that, when he has had the opportunity to make the necessary inquiries and consultations and has been able to formulate these proposals more fully and definitely, the fears of the business community will be very much allayed.
I think the Government can claim full credit for the very large and increasing degree of prosperity which many of our businesses are enjoying. To that prosperity there will probably be added, as time goes on, a further degree of prosperity, due to the Government's armaments programme. I am certain that no one will resent in this country a special measure of taxation being applied to profits as the result of the manufacture of armaments, but the Government's proposals go a great deal beyond that. The proposed tax is really a prosperity tax. I do not think that that would be or will be objected to, provided it is apportioned fairly among those who enjoy this prosperity. I think the main anxiety of the business community is lest discrimination should he rather indivious. One example, the omission of the professions from the ambit of this new proposal, is certainly arousing some concern, because there is no doubt, as has been stressed on more than one occasion in this Debate, that, for instance, the accountants will gain enormously as a result of the uncertainty and the complications which must necessarily arise when this new form of taxation is introduced.
I think the principal anxiety which has shown itself up and down the country has arisen because there is a feeling that the sheltered industries will gain and the unsheltered industries will lose, with the result that those who are most prepared to take risks in this country will be most prejudiced. I think that would be an unfortunate result, and I hope very much that the Chancellor of the Exchequer will find a way of avoiding such a result, because it is those people who are prepared to take risks in enterprise who are the greatest stimulus to increasing prosperity.
I think a mistake has been made by more than one hon. Member in suggesting that companies which have watered their capital in the past will gain as opposed to companies which have been more conservatively financed. I speak subject to correction, but I think that is a mistake because, speaking on Tuesday, the Chancellor of the Exchequer said that the capital will be calculated at the cost of the assets in the business, subject to certain adjustments. Therefore, the nominal capital will not be a matter of concern in this case. However, everyone will be very anxious to know exactly how the capital for the purposes of the Finance Act will be calculated. For instance, is the cost of goodwill to be included, whether written off or not? Will the cost of preliminary expenses be included, whether written off or not? Again, what about companies whose operations are mainly conducted abroad, although the companies are registered in this country? Are they going to be treated on exactly the same footing as companies which operate entirely in this country? In many such instances it would not be possible to say that they are gaining either from the Government's armaments expenditure or from the increase in prosperity in this country. Further, I hope very much that it will not be found that, say, a company which conducts its operations in Northern Rhodesia, a copper mining company, which has its registered office in London, will be at a disadvantage compared with a company engaged in gold mining on the Rand, which has its registered office in Johannesburg.
I know that the Chancellor of the Exchequer is anxious not to drive capital out of the country. Indeed, the advice which he has given to the City through the medium of the Foreign Transactions Advisory Committee's recommendations has shown his strong desire that capital should not leave this country unduly for foreign investment. I am not sure that the result of this proposal will not be calculated to drive a certain amount of British capital abroad. It may go further and result in a certain number of British companies forming foreign companies in order to conduct their operations abroad. I do not wish to detain the Committee any longer, but I hope very much that the Chancellor of the Exchequer, if possible to-night, or, if not, at the earliest opportunity, will endeavour to deal with

the many questions that have been put to him in the course of the Debate, in order to clear up the anxieties of the business community.

9.20 p.m.

Mr. Garro Jones: This has been a strange day in the history of the Chancellor of the Exchequer. The hon. Member for Tamworth (Sir J. Mellor) has added his voice to a large number of other supporters of the Chancellor of the Exchequer who have begun their speeches by professions of confidence in his administration and have then gone on to express the most profound anxiety about, if not open and violent criticism of, his proposals. This is the sixth and last Budget which the right hon. Gentleman will introduce. It is certainly the strangest Debate that he has had to listen to. For five years he has been held up to us as the arch-apostle of sound finance and sound administration, but to-day, because he has taken the first tentative step which touches the pockets of those he has been protecting for so long, an avalanche of criticism has fallen upon him. Surely, never has so neat a copybook had so black a blot placed upon it. When the Chancellor of the Exchequer goes home to-night, if he is inclined to philosophic reflection, I would remind him to read that poem by Robert Browning called "The Patriot," which must have been written for politicians under a cloud. Let him reflect on the last five years, when it was:
Roses, roses all the way,
With myrtle mixed in my path like mad.
To-day, he has almost been hurried to the shambles, and we wonder what will be the result to-morrow. I recognise that the support of newspaper proprietors as a whole is fickle, and the financial newspaper proprietor is especially so, but I must confess that I never thought that I should live to see the day when the "Financial News," a paper of which the hon. Member for North Paddington (Mr. Bracken) is the chairman, could write these words about the Chancellor of the Exchequer:
From every point of view the Chancellor's surprise is not only unpleasant but extremely regrettable. He has succeeded in courting a little easy popularity. As the price of that he has done a great deal of fundamental harm. His last Budget is his worst.
It has, indeed, been an uncomfortable day for the Chancellor of the Exchequer,


but I should like to say one word to cheer him. He will be able to soothe all this criticism by the large compliances he will make, and the violent speeches which we have heard to-day will prove to be just a few April showers which will have cleared up by the end of the month. Although we do not identify ourselves with the grounds of criticism upon which the speeches of the other side have been based, we have serious criticisms to make of this Budget and have made them to-day, including that most controversial proposal known as' the National Defence Contribution. But as for the suggestion that that Contribution will cripple industry or prevent the building up of prudent reserves, those of us who know anything about the history of taxation have heard that story so often that it has long since ceased to have any effect on us.
I amused myself—I think that is the right word—by reading some of the debates when the Excess Profits Duty was introduced during the last War. Cases were given where firms made £89,000 in 1913 and £367,000 in 1914 and £37,000 in one year and £131,000 in the next. And yet we had that cry that industry would be crippled if they introduced this duty and enterprise destroyed—until Mr. Bonar Law got up and made one of the most frank and forthright speeches which have ever been made from that Box. He told the Committee that he had invested not so long before £8,000 in a shipping company and he was now receiving profits to the value of £3,847 per annum, and that did not include the capital profits he was making, because he had £200 invested in one ship which had been sunk and he had just received a cheque for £1,000 to represent that capital value. That was when these complaints about crippling industry and destroying enterprise were being made, when the average impost made on industry was £375,000,000 per annum during those years and not £20,000,000 as now proposed.
We have heard from speakers on the other side of what a hardship it will be on these companies if one-third of their profit is taken away; they will be left with only two-thirds of the surplus swag out of which they must build up their reserves. I have here a statement which was made by Sir Josiah Stamp in his

work, "Wartime Taxation," and this is his comment upon that matter:
In every debate in successive years proposals were put forward for allowances to be made based upon the action that the prudent trader might see fit to take, which betrayed a touching faith that prudence was absolute in character and would remain uninfluenced by surroundings in the hands of a legion of traders all qualified to supersede St. Anthony.
Therefore, on these two grounds these cries of "Wolf!" at this contemptibly small amount, having regard to the vastly increased profits being made, leave us entirely unmoved.
What, therefore, are the real grounds of our criticism of this proposal? I should regard it as justifiable on two grounds. First that it made an effective levy on armaments profits and, second, and as an alternative ground, that it levied an effective contribution from industry as a whole towards National Defence. It does neither of these things. As far as it is an attempt to make a levy on armaments profits, it is only a minute proportion of this £20,000,000 that will come from the armament firms even in a full year. The Chancellor has said that he finds it impossible to segregate armaments profits from the profits of industry as a whole. But even if you cast your net so as to encompass every firm which can possibly be connected with armaments manufacture, you will still find that it will be but a minute proportion that can possibly be paid by them towards this impost. I would like the Committee to consider a total expenditure of £1,500,000,000 in the five years or £300,000,000 a year. If you take the amount of that per annum which can be expended on materials, it cannot be more than half, and, therefore, if you take the total profit earned by armament makers in one year it cannot on 20 per cent. on turnover be more than £30,000,000.
I know that a quotation, unsupported by the vast resources of the Treasury and so on, is bound to be approximate, but I have thrown the net wide enough to err on the side of being unfavourable rather than favourable to the contention I am making. From that £30,000,000 you have to deduct certain sums in respect of profits of firms which are not liable. But I affirm that not more than £2,0000,000 per annum, assuming that the Chancellor raises £20,000,000 in a full year by this impost, will he laid on the


back of those armament manufacturers —however wide you cast the net—whose profits have been cited as the justification of the duty.
A further serious defect of the tax is that it will be temporary. We all know what that will mean. We shall find every possible device and evasion—excessive depreciation of assets and good will, overvaluation of stocks, making capital transactions out of the sale of stocks. The classic case was that of a firm which had whisky which cost £20,000,000 and sold it for £130,000,000, but managed to get it through their books as a capital transaction, and did not pay a penny in Excess Profits Duty on it. We know that the armament manufacturers and other people concerned will employ every resource of accountancy in order to evade this duty, and all the more so because it is a temporary impost. If they can only push it forward until such time as the tax is removed, they will escape the net. Finally, it is not an effective levy on armament profits because it will be passed on either to the Government, or, in the case of those firms who do not manufacture armaments, to the public. I have a quotation from a great American economist, Dr. Eddy, who writing at the end of the last War, said:
There is general agreement in England that in the case of commodities manufactured under Government contract, especially during the earlier years of the War, the Excess Profits Duty was very often taken into account in arriving at prices, that is, the manufacturer usually considered the Excess Profits Duty an expense, and succeeded in securing terms which left him after paying it about the same amount of profit he would have striven for had the tax not been in existence. Consequently the tax in England was probably to a considerable extent illusory; the Government itself creating the profits which it took back in taxes.
In case any hon. Member has a prejudice against an American economist, let me say that Sir Josiah Stamp with his great record and authority said:
It is difficult to dissent from that view.
This tax on armaments is an illusory safeguard and can be justified only on the ground that it is an effective general levy on industry to contribute towards the cost of a war. Let me deal with that contention. The clue to the extent to which the tax is spread is strangely enough to be found in the varying voices of those who have commented upon it on the opposite side of the House and in the commercial

and daily Press. If you follow up the business connections of those gentlemen who say that it is a fair and reasonable proposal, like the hon. Member for Hampstead (Mr. G. Balfour), the managing director of Woolworths and others, you will find that they are connected with businesses which will not be touched by it. You have Woolworths paying 80 per cent. and 100 per cent.; they will not pay a penny, or at any rate it will be a negligible amount. There is Joseph Lyons and Company with their vast profits, and Imperial Chemical Industries who made a profit of £7,200,000 and who will pay £170,000, unless their profits greatly increase. That is only one-fortieth of their profits.
There is another very interesting class of enterprise which will remain untouched by the proposal—the joint stock banks. There it may be we shall find the mainspring of the proposal. Take the Midland Bank with a capital of £40,000,000. Looking back over its history you find 16 per cent., and 16 per cent. and 16 per cent. Strange is it not that their earnings should always remain at such a steady level? It would take a very shrewd accountant to find out where the surplus has gone, but most people know nevertheless. It has gone into new premises and other things. Take Barclays Bank, which has paid 14 per cent. from 1924 to 1936. None of these vast enterprises will pay a penny of what is described as a contribution towards National Defence. How, therefore, can the tax be so described? It is not as if meritorious effort or a general contribution towards the welfare of the community was the test as to whether they will come within the net or not, because these meritorious enterprises are assessed for profits on precisely the same basis as profits arising from speculation, from security values, from armaments. Or if you like to take another class who are unpopular with the more enterprising branches of industry, those people who lock up vast sums in gilt-edged securities, they will not pay a farthing towards the cost of these armament schemes.
Even if the scheme finds its way on to the Statute Book it will be further lessened and reduced by endless exceptions and reductions. I should like to know whether the Chancellor of the Exchequer proposes to set up a board of referees to deal with all the questions which will arise. That


was found to be necessary when the Excess Profits Duty was put on, and the claims for exemptions and mitigations, and reductions put forward were on such increasingly flimsy grounds that the chairman at one sitting was moved to remark that before long they would be asked to exempt firms on evidence based on nothing stronger than the photograph of the managing director. The same thing will happen here. My belief is that this payment will tend to become like one or two other of our taxes, little more than a glorified subscription list, to which those will subscribe whose conscience or opportunities do not allow them to evade it. The armament manufacturers are not going to be found at the head of that list.
The Chancellor of the Exchequer has been called the iron Chancellor, or was it the iron and steel Chancellor. In any case that epithet does him less than justice because he has protected the interests of other commodity merchants just as well. It would be just as fair to call him the rubber Chancellor or the tin Chancellor, because we can be perfectly certain that they are not going to suffer much from this tax. However, in spite of all the turmoil, I am sure the Chancellor will survive the storm. For our part we are equally unimpressed by the clamour, or the proposal to tax armament profiteers. The real test of a Budget is not what it adds to the wealth of those who already have ample, but whether it relieves that enormous mass of poverty and suffering which is represented by 10,000,000 of people on the lowest scale of living in this country, and who are the real weakness of our country to-day. For them, neither in this Budget nor in his five previous Budgets has the Chancellor of the Exchequer introduced any effective proposal. Nevertheless that remains the acid test of sound finance and good statesmanship, and by that test the Chancellor of the Exchequer will be judged and condemned.

9.45 P.m.

Mr. Morgan Jones: Most of the discussions in the latter part of our Debate this evening have centred round and been occasioned by the new tax which the Chancellor of the Exchequer has proposed in his Budget, but I may perhaps be permitted to revert to a more general discussion, because after all, it is the Budget as a whole that is the subject of our discussion here to-night, though, of

course, it is appropriate that we should give our minds in particular to the consideration of this new imposition. I believe there is still a ha bit in some parts of the country, when a wealthy person passes on, for the relations to gather at the home of the deceased to hear the will read, and I believe too that on those occasions the flow of tears is in proportion to the amount of the inheritance. We all turned out last Tuesday to hear the will read, and as usual there has been rather more than the usual rumpus among the relations. I believe the Home Secretary is nominated as the principal heir. We heard the Chancellor of the Exchequer develop his theme, and I rather guessed that the Home Secretary was muttering to himself, "The old rake has left me nothing, except colossal debts and some good advice." I hope the Home Secretary is proud of the patrimony which is left him when he enters on his interitance.
My right hon. Friend the Member for Hillsborough (Mr. Alexander) reminded the House of a very important fact, I believe, that this country is now within speaking distance of a series of £1,000,000,000 Budgets. The Chancellor of the Exchequer, very wisely, if I may say so, reminded the Committee of what yet may be in store for him, in the speech which he made on Tuesday, when he used these words:
But in the statement relating to Defence expenditure, which was issued last February, it was clearly laid down that although it was not yet possible to determine which year would see the peak, the level of Defence expenditure was likely, over the next two or three years, to be very much heavier than in the present year."—[OFFICIAL REPORT, 20th April, 1937; col. 1614, Vol. 322.]
The Chancellor may claim that he has not concealed the fact from the House and the Committee that our prospective commitments are likely to be heavier in subsequent years even than in this year. A £1,000,000,000 Budget in ordinary circumstances is, of course, an unprecedented figure, but it need not be an unduly alarming one, given certain conditions. One condition must obviously be that the revenue of the country must not only be buoyant, but there must be some assurance of continued buoyancy on the part of the revenue. Yesterday the Chancellor seemed to indicate that he for his part inclined to be optimistic. Perhaps it is the job of Chancellors to be optimistic when speaking of revenue, but


I would like to remind the Committee, none the less, that there are some factors to be borne in mind in connection with the present and prospective Budget commitments.
We are in process of passing through a boom, and I would like once again to recall to the Committee that some of these factors are factors that will not return. But they are factors none the less that have inured to the advantage of the Chancellor of the Exchequer while he has been in office. First of all, for instance, we have gone off the Gold Standard; we cannot go off the Gold Standard again, and whatever benefit going off the Gold Standard might have brought with it—and it has brought benefit undoubtedly—there it is and it cannot recur. We changed our fiscal policy. I am not arguing now whether that is right or not. It is not perhaps appropriate at the moment to discuss it, but we have changed it; and may I remind the Committee that this change of fiscal policy was the trump card of hon. Gentlemen opposite behind the Government? It has been the one thing to which they have committed themselves as a Conservative party for 30 years or more. But now they have played their card and so they cannot play it again. Trade policy, of course, may have to be altered, but I want to put this to the Committee: If a change in trade policy is to influence our revenue for good, I believe it would be found that it can be possible only by modifying and altering in some degree even the direction of our trade policy. We shall have to turn in the direction probably of freer international exchange of commodities. We Labour Members have frequently been accused, both here and outside, of being too doctrinaire. I cannot argue that point now, but it may well be that the Protectionists will suddenly become subject to the same criticism, and legitimately. Certainly, given a certain amount of open-mindedness on this matter of tariffs or Free Trade, a greater opportunity seems to me to be opening before the Government than has been available for a good number of years in the matter of assisting the development of international trade.
The hon. Member for Oxford University (Sir Arthur Salter), in a most interesting and stimulating speech this afternoon, pointed to that fact. The Protectionist

oftentimes claims that once he has imposed these tariffs he is possessed of a specially useful bargaining weapon. Very well, now is the time to use it if there is any value in it at all; and I am quite sure that there is every reason to invite the Government to utilise to the full whatever benefit there may be attachable to this tariff procedure as a bargaining weapon with other countries. The second factor is a change in our tariff policy; and the third—I beg those who are so eulogistic of the work of the Chancellor in the last five or six years to keep it in mind—is that we have not provided for the Sinking Fund either this year or for several preceding years. Might I remind the Committee of the fact that the right hon. Gentleman the Member for Epping (Mr. Churchill), when Chancellor of the Exchequer in 1928, especially introduced into his Budget of that year the principle of Fixed Debt Charge, and that Fixed Debt Charge was to include interest and Sinking Fund. The figure laid down by the right hon. Gentleman was £355,000,000.
That principal was abandoned in the second Budget of 1931, and in the last four Budgets no provision has been made for Sinking Fund. My fourth point is that we have not had proper regard to certain external debt charges. The American debt, for instance, has not been disposed of, as far as agreement is concerned. The fifth item is that—I think it is since 1932—we have had the benefit of reduced interest charges. That has been a substantial benefit, but I cannot see the Chancellor of the Exchequer being able to repeat for some time to come what he did a few years ago in that respect. In the Defence Loan Debate I ventured to remind him that there is a body of some £350,000,000 of debt which will be convertible about 1940 or 1941, but he will not be able to convert it in 1941. I venture to prophesy that the rate of interest then will make it almost impossible to do so. The sixth factor that has been favourable is this measure of boom which we appear to be enjoying.
There are six factors which have helped the Government enormously. I am not now discussing what credit is due or is not due to the Government. Those six factors have been there, and I ask the Committee to bear in mind the fact that they cannot be counted upon in the


future, and that we must leave them out of account when we have regard to the responsibilities of the future. Take the case of the boom. The Chancellor of the Exchequer rightly reminded us the other day that his Budget was overshadowed by the Defence commitments. The shadow of the gun, so to speak, is over these proposals. I admit that the present boom is not entirely due to armaments. Some of the improvement is due to causes which have already been mentioned, but a substantial benefit has undoubtedly accrued from the armaments campaign. I ask the right hon. Gentleman this question. How long can we count upon the boom in respect of armaments? Sooner or later, as everyone knows, the armaments campaign must come to an issue. It may end in a clash of the nations which we would all deplore and which we all hope may be avoided. Or better sense may prevail, in which case an agreement to disarm in some degree may be accepted by all the nations. But in either case it will be the end of the boom as far as armaments are concerned. That artificial prop of prosperity will go and when that adventitious aid has been removed, what will be the inevitable consequence? We know the sights which confronted us in the days immediately after the War. We remember the great factories and workshops which were built in various parts of the country and the moment the armaments campaign of those days stopped, those great factories and workshops became derelict. Now they offend the eye with ugliness and ruin in our countryside.
In spite of all those aids which I have mentioned, such as going off the Gold Standard, the change to a tariff policy and the rest, the Government have not been able to reduce our unemployment figures much below 1,500,000. When the armaments campaign is over and when we enter the slump, the unemployment figures are bound to multiply, and the problem which will then confront the country will indeed be most grave. There is one other point which I would mention in this connection, and that is the question of prices. I do not dwell upon it because other speakers have dealt with it. But it seems necessary to point out that one inevitable consequence of the present soaring prices must be that production will receive a special stimulus

and that production under that artificial stimulus may, in the end, exceed demand. On the other hand, a decline in purchasing power will reduce the demand at the other end, and that, it seems to me, is bound to add to the conditions of slump in various parts of the country.
I recite these points because I consider it is the business of the Chancellor not merely to think in terms of this year or next year, but to anticipate the problems which will confront the country five or ten or even more years hence. We are, I submit, leaving far too much to posterity. This Budget errs on the side of making insufficient provision at this moment to meet the commitments into which the country has entered. My next point is not, I think, an unfair point to make on this occasion, because it was made by the famous May Committee in its report on the cost of the social services at that time. The more we avoid facing this problem., the more we throw upon future generations difficulties which it will be hard for them to surmount. Some weeks ago we had an important discussion here on the subject of population, in the course of which hon. Members pointed out that, assuming the birth rate and death rate to remain about the same, the population of England and Wales in 1940 will be 41,000,000. But in the year 1975 the population will have slumped to 31,000,000. More than that, the worst of it is that the balance as between the various age groups in the population will have been radically changed by 1975. The consequence will be that the burden which will fall on the active workers will he all the heavier because of that distortion of the balance. To that generation we are leaving a problem of the greatest possible perplexity. The Chancellor in his effort this year to deal with the nation's finances is not sufficiently courageously meeting these problems.
To turn to the Budget itself. The Chancellor assumed a little too lightly that hon. and right hon. Members have been completely reconciled to the arrangement which he made when he created the Exchange Equalisation Fund. This is the sixth year I have been chairman of the Public Accounts Committee of this House, and, although I do not speak for my colleagues, I believe that some of them will be in complete accord with what I say. We have had two years' experience


of reports on this fund, and personally I hold that the concession which the Chancellor made two or three years ago is really almost useless. What happens is that the Comptroller and Auditor-General makes a report stating that he has examined the accounts and that on a certain date the fund stood at so-and-so. As chairman of the committee I cannot allow a single member to put any question beyond that. I ask the Chancellor what information is that at all. This fund has now been in operation some years, and I venture to say once again that even if the Chancellor allowed the fund accounts to be examined by the Comptroller and Auditor-General like other funds, they would not be examined by the Public Accounts Committee for another nine months at least in the financial year. What possible harm could there be to the interests of the fund to allow the Public Accounts Committee of this House to know all there is to know? I mean, to know what is the state of the fund at a certain date, and to be allowed to ask questions about it. I would not be foolish enough to ask what the transactions were on the date they were made, but months after the end of the financial year surely there could be no harm whatever in asking for information. It is not good for the country as a whole that a fund of £350,000,000 like this should be carried on without the Public Accounts Committee having access to more adequate information about it.

Sir Irving Albery: I am speaking only for myself as a member of the Public Accounts Committee, but I think if the Chancellor could assure the House each year that the fund had shown a profit in the year under review that would satisfy this House.

Mr. Jones: The Chancellor told us on Tuesday that he is willing for the Public Accounts Committee to know nine months hence. That is not treating the House in the way it ought to be treated. There was something to be said for the Chancellor's viewpoint when the fund was first established, but now that it has been in existence for three years I cannot see any reason for withholding the information for which I have asked.
The Chancellor took power on Tuesday to include £10,000,000 for Supplementary Estimates. Once again I must

demur to that. From time to time representatives of Government Departments come before the Public Accounts Committee-and are asked to defend the action of their Departments in having incurred expenditure on a Supplementary Estimate. What is my Committee to do? If the House of Commons itself is going to encourage Government Departments in advance to incur Supplementary Estimates, how can we sit in judgment on the Government Departments if they do the same? You take away from the Public Accounts Committee the very ground on which it stands. The Chancellor is not entitled to ask for this £10,000,000 without the House of Commons knowing at least what the Supplementary Estimates are mainly for. I must protest against his action in this matter.
On the new tax, which has been discussed almost ad nauseam, I will confess to the Chancellor that on reading this scheme my first reaction was completely favourable. Even now I think the Chancellor's action and intention in seeking to obtain from industries which are deriving a special advantage this special contribution, is proper and wise. I agree with the general principle of what he has propounded, but although I am in favour of the principle as being a right one, what I have heard here to-day makes me believe that the incidence of this tax may be exceedingly unjust as between one individual and another, and one trade and another. The Chancellor is justified in seeking this special contribution somehow, but in doing it I think the whole Committee will agree that it must be done as equitably as possible, causing as little injustice as possible between one group and another. It is impossible to say that any given amount of profits is solely attributable to the armaments campaign. I think it was the Junior Member for the City of London (Sir A. Anderson) who said that the effects of the armaments campaign spread. As when a stone is thrown into a pond the circles go on expanding, so all sorts of trades benefit directly or indirectly from the armaments campaign. I am bound to say that I am very much impressed by the case of those who argue that, however right it may be to exclude certain individuals or certain trades, it cannot be right to exclude certain other individuals and certain other trades.
Let me put another point to the right hon. Gentleman. There are in this country people who are called landlords. In South Wales recently a large tract of land was bought for the purpose of putting up a new aircraft factory. There are people who have pocketed, or are likely to pocket, vast sums of money because of the erection of new factories of that sort upon their land or near to it. Why should those people not be specially mulcted, just as much as the people who happen to be connected with the armaments industry? I am sure the Chancellor will agree that, however much he may desire to get this money—and I am happy that he is seeking to get it—the regulations or rules governing the application of the tax must be very carefully drafted. I have the greatest admiration for the members of the staff of the Inland Revenue Department, competent people as they are, but I am unwilling to allow the task of determining the rules for applying this tax to go outside the House if it can possibly be avoided. It is a House of Commons matter, and not a matter for any Government Dapartment to determine by itself.
Earlier in my remarks I suggested to the Chancellor that this Budget really avoids facing a problem that must be faced. We can go on borrowing for five years or for 10 years, but in the long run we shall have to start paying. I agree with the hon. Member for Camlachie (Mr. Stephen) that that is when the fight will develop. Another Committee such as the May Committee may be appointed. It will make recommendations as to where it thinks economies should be effected, and here and now I can say to the Chancellor and those who support him that we consider that those who profit most from this campaign should be called upon to bear the biggest burden. We cannot contemplate once more cutting down our social services, pensions and the like, because they are the essential comcomitants of a happy life for the people of this country. I therefore beg the Chancellor to keep this well in mind. It is not just or right or equitable to hand on to another generation, which will have problems of its own to confront, difficulties which it is our duty to shoulder.

10.20 p.m.

The Chancellor of the Exchequer (Mr. Chamberlain): Whatever may be the

merits or demerits of the Budget, it has, at any rate, brought out to-day a number of speeches which, so far as they related to the Budget, have illuminated the subject. I could not help feeling when listening to the Debate how valuable it is to have the play of experience and of knowledge upon which one can always rely from Members of this House in pointing out what difficulties may arise in dealing with so complex a subject as that which has been principally spoken of to-day. The speech with which the Debate began, that of the right hon. Gentleman the Member for Hillsborough (Mr. Alexander), I am not classing among those which were relevant to the Budget. It proved entirely to his own satisfaction, and presumably to that of his friends, that my reputation, if I have a reputation, as a financier, was completely unfounded, and that, having found the finances of the country in complete apple-pie order, I have left them in a position of more or less confusion after having violated every canon of sound finance. His estimate of my tenure of office will not in the end be the deciding factor, and if that is his view and that of his friends, I know that nothing I can say in reply will alter that opinion.
We are discussing to-day things which are much more important than the reputation of an individual Member of this House, and it is very natural that the chief interest of the Debate has revolved round the novel and unexpected proposal which I made on Tuesday. Before I deal with that, however, may I say one or two words about the speech to which we have just listened, a speech which as we always expect on these subjects from the hon. Member was thoughtful and full of points which were relevant to the occasion. I do not disagree with a good deal of what the hon. Member said. Certainly I am not one to under-rate the gravity of a situation in which one has to deal with a Budget of between £800,000,000 and £900,000,000. Nor am I one in any way to minimise the difficulties which the necessity for rearmament is introducing into the economic situation of the country to-day, and perhaps still more in a few years' time. A recognition of those difficulties must always be borne in mind when considering the proposals which I have put before the Committee. I do not differ either from the hon. Member in


the view that Protection is not an end in itself. It is a means to an end which has to be used with discretion and intelligence. The hon. Member says that now is the time to use it as a bargaining factor for reducing the tariffs of other countries. Surely he is forgetting that that is what we have been doing for years. We have already secured over 20 such bargains, even excluding those which were secured at Ottawa, and the results were quoted by my right hon. and gallant Friend the Financial Secretary and show how greatly we have benefited by the reductions in tariffs which we have been able thereby to secure.
The hon. Member returned once again to the Exchange Equalisation Account. He knows perfectly well that I have not concealed or attempted to conceal anything from the Public Accounts Committee because I wanted to conceal anything from them, but that, owing to the nature of the case, the very purpose for which the Exchange Equalisation Account was set up requires that utmost secrecy.

Mr. Morgan Jones: I hope I did not give the impression that there was secrecy for the sake of secrecy. I was questioning the wisdom of that secrecy.

Mr. Chamberlain: It might be a question of the wisdom of the information or the object of the information which the hon. Member desires to have, but I would say this, that I am quite ready to discuss the question again, and if there is further information which can be given to the hon. Member or to the Public Accounts Committee without prejudicing the objects for which the Account was set up, I shall be prepared to modify the arrangements I have made.
There are two other matters upon which, I think, I ought to touch. One was mentioned by my hon. Friend the Member for Huddersfield (Mr. Mabane) and was repeated by the hon. Member who has just spoken, and that was the advance provision for Supplementary Estimates of £10,000,000 for Civil purposes. The hon. Member has protested against my making an advance provision of that kind. I quite agree that one should not do it unless one has pretty clearly in mind the purposes for which it may be required, but if one has in one's mind something of the kind one would not be giving a true picture to the Committee and to the country unless one did put in some sort of

figure which has a relation to the amount which it is expected will be spent. I need not specify all the things which I have in mind, but I will mention two, one of which, at any rate, might be of considerable importance. We have to provide an unknown sum, a sum of which we can make no precise estimate, for the Special Areas. A Bill is passing through the House at the present time, and we know that there will be new demands on the Exchequer under the provisions of that Bill, and it seemed to me that it was proper and right to make some provision for it. The other purpose perhaps might not have occurred to hon. Members, but it is a fact that the whole expense of our programme of Defence is not contained within the Estimates of the Defence Services. We have to consider air raid precautions, and whatever expense that may mean—and it looks to me as though it might reach rather formidable dimensions —will have to come out of the Civil Votes and not out of the Defence Votes, and that is another item which is included.
Then there was the question of the Miscellaneous Revenue. In my Budget speech I reminded the Committee that this Miscellaneous Revenue fluctuates very violently from year to year. For instance, in 1933 the total receipts were more than £22,000,000, but that was because there was a windfall of £10,000,000 available from the Depreciation Fund following the conversion of the 5 per cent. War Loan. There were other special receipts and with these, the amount actually received in 1933 was only a little more than £10,250,000. It was actually less than the estimate for the present year. I have already mentioned that we have to provide £5,250,000, or rather that we shall lose that sum which was provided last year from the Road Fund. There was also last year £5,750,000, which had accumulated as the result of the redemption of Victory Bonds which had been tendered in payment of Death Duties, and which had been paid for by the State in previous years. There were other small items, but perhaps these will be sufficient for the Committee.
Let me come back to the question of the National Defence Contribution. Many hon. Members must have asked themselves the question: "Why did the Chancellor think it necessary to bring forward a proposal of this kind when he was within


£2,000,000 of balancing his Budget?" I am not surprised that hon. Members should put that question to themselves; I think it is a very natural one. I am surprised that my hon. and learned Friend the Member for Montgomeryshire (Mr. C. Davies) should think that I had been actuated by a desire to catch votes, a suggestion which seems to me on a par with that which was made by an hon. Member a little while ago to the effect that I was endeavouring to court an easy popularity. After basking all the afternoon in that easy popularity, I appreciate the value of that suggestion. Of course, I knew perfectly well, that in springing this surprise upon the Committee and upon the country, I was bound to come in for the most violent criticism and the most exaggerated ideas of the savage nature of the impost which I was proposing. I cannot help thinking that the hon. Member for North Tottenham (Mr. R. C. Morrison), in his witty and amusing speech this afternoon, must have very much bowdlerised the list of epithets which has been applied to me. I should be quite prepared to hear that something very much more violent than that will still come to my ears.
I wonder whether hon. Members have considered this fact about the deficit: It was reduced to £2,000,000 only by the fact that I was proposing to borrow £80,000,000 for the Defence Services this year. I tried to point out in the Budget Statement that, if I had fixed the amount which I was going to borrow this year in relation to the actual amount of expenditure this year, having regard to what the expenditure might be in future years, I should have put it much lower than £80,000,000, and that the only reason why I put it so high was that the particular proposal which I had in mind could not, I knew, give me any more than a very trifling sum this year, although it might be expected to produce a very considerable sum in future. It would have been very easy for me to have said nothing about it. Whatever the hon. Member for East Edinburgh (Mr. Pethick-Lawrence) might say, or, at any rate have in his mind, there has been no comment in this House upon the fact that I had begun by borrowing this £80,000,000, and it would have been very easy for me to have avoided the hornets'

nest and to have gone on my way rejoicing, having balanced my Budget and not having given rise to any controversy whatever. Surely everyone must realise that no motive eithen of a personal or of a partisan character could possibly have actuated me, but only an overwhelming sense that it was necessary, in the general interest of the country, to look beyond this single year and see what we had in front of us, and to try to make the country realise that, unavoidable as may be the necessity for rearmament, we cannot expect to put the cost of it upon posterity. It was a sense of that kind that made me feel that I should not be answerable to my conscience if I had gone on and said never a word upon this matter.
In that statement relating to Defence expenditure, the programme was put at £1,500,000,000, of which £400,000,000 was the most that it was proposed to borrow; £1,100,000,000 was to be found out of taxation. Can we be sure that that is all? Every one of us must hope, none more than I, that some means may be found to put an end to this armaments race; but in the meantime we are absolutely bound to go on until we have put ourselves in a position in which we can feel that we have attained safety. If from time to time we have to put up the bar so that we must jump higher and higher, we must be prepared to face that rather than to leave ourselves defenceless in an armed world.
This country has got to find out of taxation very large sums during the next few years. As I said before, it is fortunate that at least we are in a far better position to meet those liabilities than we were a few years ago. When one considers the particular proposal which I have put before the Committee, and listens to the criticisms, or some of the criticisms, that have been made upon it, one must ask oneself what was the alternative; in what other way could these great sums be found? The hon. and learned Member for Montgomery would put the whole of it upon the Income Tax, and he thinks that that would be fairer than the plan I have proposed. There are many thousands of small Income Tax payers to-day who are no better off at all than they were a few years ago. Can it be said that it is fair to put the whole


burden upon them when, looking at their paper, they see that others, more fortunately placed than they, are making increasing profits out of conditions in which they cannot share? I cannot but think that, if I had attempted to do that, I should, quite apart from any injurious effect which it might have had upon the progress of industry, have been condemned by the good sense and the sense of fairness of the country as a whole as having put an intolerable burden on the shoulders of those who were least able to bear it.
There have been some severe criticisms of my proposals to-day, but on the whole they have not gone further than I expected, and I would like to thank those hon. Members, not on one side of the House alone, who have declared their approval of the principle of the impost, even though they have felt some anxiety and some doubts as to the way in which it was going to be carried out. I think there is still a certain amount of misunderstanding as to the way in which I regard this National Defence Contribution. I do not regard it as a form of punishment or penalisation for profiteering. It is not directed solely against armament firms and I wish here to say, in spite of repeated assertions made by some hon. Members, without much evidence, that I do not believe that there is any considerable amount of profiteering among the main contractors for munitions, and I am confirmed in that view by the fact that the Select Committee on Estimates in its report published last month says, among other things, that they are satisfied
that the methods followed are soundly conceived and are fair both to the taxpayer and to the contractor, and they are of opinion, so far as an estimate can be formed, that they have been effective up to date in preventing profiteering at the taxpayers' expense.
You may make your contract with a great firm which is turning out your armaments. You may bring your accountants and your officials, you may check in every possible way the prices that they are charging, and you may succeed in your efforts, but, as my right hon. Friend the Member for Hillhead (Sir R. Horne) said, when you place these orders it is like throwing a stone into a pond. The effect grows in ever widening circles. I will add this to what he said, that the further the circumference of the circle is from the centre the more difficult it is to

exercise control. It is the sub-contractors and the sub-sub-contractors whom it is impossible, however much you try, to control in the same way as you can control the main contractors. There is also this to be said, that most of these smaller firms who are sub-contractors to the large ones are doing not armament work alone but a great deal of other work as well, and that the task of distinguishing between what they make from armaments and what they make from their other commercial work would be impossible.
Here are a great number of firms which are doing a great deal better than they were. Since we have got to find this large sum of money in this short time, the fairest thing to do would be to go to those who are, in consequence of the prosperity of the times, doing better than they were before, and ask them to make a special contribution. I believe that principle to be fair and right, and one which will commend itself to, the majority of the people of the country. The difficulty is to put it into practice without creating hardship or injustice as between one firm and another. The disadvantage of a Budget proposal of this character is that, owing to the necessity of preserving secrecy up to the very last, you cannot make those preliminary soundings and have those preliminary consultations which you would do in the case of an ordinary proposal. One has to search for such safeguards as one can think of. One has to base oneself, as far as possible, upon past experience and, having described in outline form the project one has in one's mind, one must trust to have opportunities after that of consultation.
While I have been asked a great number of questions, and while I may perhaps give answers to some of them, I should like to suggest to hon. and right hon. Gentlemen that it would not be well, it would not be wise to ask me to pledge myself at this stage too specifically to particular answers to those particular questions. If I can be allowed in the interval which must now elapse before the Finance Bill can be introduced to make such inquiries as are open to me and to find out what are the possible dangers in the way of injustice or inequality contained in this proposal, then I had better have a certain amount of


elasticity so that I can conform to what may come to my notice.
I have not quite as much time as I had expected and I must, therefore, ask for the indulgence of hon. Members, if I leave out some of the things upon which otherwise I should have touched. Let me, first of all, say a few words upon some of the general questions or dangers which have been suggested as likely to arise out of my proposal. The first one that has been mentioned is that the only result will be that firms will put up their prices, and in that way recoup themselves for whatever is going to be taken from them by the Government. I do not think that it is safe to assume that what went on in the time of the Great War will necessarily be possible to-day. The conditions are very different. At the time of the War, perhaps particularly in the latter part of the time, anybody could sell anything that was wanted for the War and almost get his own price for it. The demand was so great and the supply was always lagging behind it, and consequently it was the seller who had the whole of the cards in his hands. That is not so to-day. To-day there is the play of competition. I have satisfied myself that it would not be possible for firms to recoup themselves for the much more moderate slice of their profits which I am proposing to take, in the way that happened during the Great War.
Another suggestion made is that firms will put their profits—I think it was the right hon. Member for Hillsborough who suggested that they would do it in a way of which he had recollection in the Great War—into huge buildings, and withdraw them from the operation of the plan. To begin with, once the profits are made they will be subject to the charge before anything can be taken and put into buildings. There will not be the same opportunity, again, in this case, because where new buildings are wanted for the purpose of the armaments programme they are in the majority of cases being erected at the expense of the Government, and will belong to the Government at the end of the period. Seeing that this is a tax which is put on only for a time, it seems to me that for a manufacturer to withdraw some of his profits and put them into buildings or equipment in order to escape for a few years from this particular charge, with

the risk that he might then find himself saddled, as many firms were saddled at the end of the Great War, with buildings which were only a liability and not an asset, is something which is not very likely to take place. Then there has been a great deal said about the position of firms who have not been doing well or have done badly during the three years which are to be taken as the standard as compared with firms who have never really suffered materially from the depression.
The proposal is that this is a charge upon the growth of profits, and it is extremely difficult to see how in such a case if there has been no growth of profits you can make a charge. I do not think it is the case that there will be no growth of profits, but I quite agree that in some of these cases the growth of profits will not be as much as in some cases where they start from a lower standard. That is one of the questions into which one must make a most careful inquiry.

Mr. George Griffiths: There will not be much left.

Mr. Chamberlain: The result will turn very largely on the way in which capital is determined. That is a point to which particular attention will have to be directed. On that a number of questions have been asked, on which I will only make the most general form of reply. I have been asked, for instance, how depreciation—in the case which the right hon. Member for Hillhead gave on shipping, where shipowners have not been able to make sufficient provision for depreciation of their ships—is going to be treated. I said that losses which had been incurred during the last four years and had not been written off would be allowed as a set-off against profits before considering what was subject to the charge. I should consider that if there had not been sufficient profits to provide the requisite depreciation that unabsorbed depreciation of which the right hon. Gentleman spoke would be part of the loss.
Then I am asked whether goodwill will be included in the determination of capital. If the goodwill has been purchased for cash it must be taken in as part of the capital. If an individual simply turns his business into a limited company and puts down a large sum for goodwill in order to have a big capital


for the purpose of the tax that would not be a case in which goodwill could properly be taken into account. Then there are all the complicated questions which arise under holding companies and subsidiary companies. These, I should imagine, would best be treated as one, treated as a whole. Their assets would be taken together. That was the plan which was followed, I believe, in the case of the Excess Profits Duty, and a plan which was adopted at the request of the industries themselves. There is one other question which has been repeatedly brought up. Again I am not expressing any surprise. I have been asked, Why is it that you are going to leave out of account of this Proposal such professions as that of accountants, who are likely to obtain special benefits from the necessity there will be to employ their services in estimating capital? That is a practical difficulty, and I agree that as far as equity is concerned I do not see why they should be excluded. My difficulty is that I do not see how to bring them into a plan of this kind for the reason that there is no capital standard that can be applied in their case. They are people whose capital is their brains, and I cannot see how to devise a way to deal with that factor.
I have explained why, in bringing forward this proposal, I have had to leave a good many details still vague and fluid. It is hardly in accordance with the policy I have followed ever since I have been at the Exchequer to impose a tax of such a character as to repress, hamper and check industry or drive capital out of the country. I have explained what was the idea in my mind in proposing this tax and the nature of the expenditure it was intended to meet. I would ask that no hasty conclusion should be come to until there has been more opportunity of seeing the proposals in their detailed form, and, particularly, I would ask hon. Members to bear in mind that it is not intended to be a crippling or penalising tax. It is, as its name implies, a contribution which, I think, may fairly be made by those who are earning increased profits, but it is not intended to do anything which will create injustice or inequity as between one class of firm and another, if it is possible to avoid it. Nothing in this world is perfect, and I do not pretend that in this, or in the Income Tax, or in any other form

of taxation, absolute equality and justice are attained as between man and man, or between firm and firm. But I do say that the project which is before the Committee must be taken as an outline, the details of which will be filled in when the Finance Bill is before the House.

Question,
That it is expedient to amend the law relating to the National Debt, Customs and Inland Revenue (including Excise), and to make further provision in connection with finance.
put, and agreed to.

Resolution to be reported upon Monday next; Committee to sit again upon Monday next.

Orders of the Day — SPECIAL AREAS (AMENDMENT) BILL.

Considered in Committee. [Progress, 19th April.]

[Sir DENNIS HERBERT in the Chair.]

CLAUSE 2.—(Power of Commissioners to let factories.)

11.0 p.m.

Mr. Harold Macmillan: ; I beg to move, in page 2, line 4, to leave out "reasonable."
This is the Clause that under the Special Areas Act lays dawn the power to the Commissioners to do what they have not been able to do under the preceding form of administration. The Clause provides that it will be the duty of the Commissioners to arrange that any leave granted under the Section shall
produce a return as nearly as may be equivalent to a reasonable rate of interest.
I put down this Amendment for the purpose of ascertaining if I can from the Minister concerned what he regards as a reasonable rate of interest. The Minister among his very various qualifications is an authority upon labour, an authority upon rating, and I hope in his reply to-night he will show that he is an authority on monetary policy. But this expression, "a reasonable rate of interest" appears to be a very vague one. We have just been listening to the Debate on the Finance Bill, and I have no doubt we have in the course of that Debate heard what in certain circumstances is a reasonable rate of interest on capital, and I only want to know how this is intended to operate?
It would be interesting to know what is the meaning of this term. It seems to


me that if it is put forth as it stands now it is a very vague expression capable of great discussion and great definition, and therefore I think we should have some explanation from the Minister as to what he means by this expression. How does he interpret it? I take it that it can only be related in some way to the principal value of money. We shall have a great discussion upon what might be regarded as a reasonable return on speculative money, but here we are dealing with what might be called gilt edged money borrowed on Government account and with Government security. Therefore, in a reasonable return we are not entitled to take into account the speculative character of the investment but merely the money rate ruling at the time. They may be a period of low money value or there may be a period of high money value. We have passed in the last 10 years from a high money to a low money period, and I wish to try out the experience by what is the current monetary policy as expressed by the Bank of England. The normal banking method, the normal charges made by joint stock banks upon overdrafts and upon loans has been from time immemorial tied up to the Bank of England re-discount rate for the time being, and I hope that either the Minister will see his way to accept the Amendment or to give some explanation of this term "reasonable rate of interest."
It is one of those terms which sound well, but it seems to me that if tested at the courts it would present very great difficulties to those who had to interpret it, and it would be much wiser if it were the rate of money at which the Government can borrow, or the rate on which the joint stock banks are prepared to lend on the best possible security. We ought to say what we mean. The Bill already has a great deal of obscurity in it and a number of rather vague terms are to be found in the later Clauses. I put forward the Amendment in order that we may have, what I have no doubt the Minister is prepared to give, namely an explanation of what the term means and how it may be expressed in the fluctuating values of money and also whether there is to be some definite relation between the monetary policy of the Government from time to time and the rents to be charged to the undertakings covered by this Clause.

11.6 p.m.

The Minister of Labour (Mr. Ernest Brown): I think my lion. Friend has read more into this proviso in the Clause than it contains. What it seeks to do is to secure that, in the operation of the new powers of the Commissioner under this Clause, there shall be no subsidy given to any of the undertakings. The answer to my hon. Friend, with regard to the method which the Commissioner will adopt, is that he will in assessing the rent have regard to the rents charged by the trading estates or by other owners for factories of similar types in the areas concerned. My hon. Friend's two Amendments seek to define the rate of interest on which the Commissioner is to base the rent. Two questions are involved in that proposal. The first is whether it is desirable or practicable to provide a maximum rate of interest or whether it is better to leave the matter as it is in the proviso. The second question is whether, if it is desirable to fix a rate, the rate which my hon. Friend proposes would be the appropriate rate. Let me state the considerations which I would urge on the Committee in asking them not to accept the Amendments but to abide by the proviso as it is. The Committee will agree that it would be impracticable to prescribe a maximum rate of interest in connection with a process of this kind. The rate will be bound to vary according to a number of circumstances, such as the type of factory, the period of the lease, the allowances to be made for "voids" or empties and repairs and the actual expenditure incurred in setting up the factory. There will be, of course, many types and grades of factories to be provided for the purpose of getting new industries in the area by the new and unorthodox power given under this Clause to the Commissioner. Therefore it would scarcely be practicable to deal with a variety of conditions of that kind in the fixed, rigid and arbitrary way which my hon. Friend proposes.
With regard to the second point, surely my hon. Friend will agree that it would be inappropriate in a case of this kind to prescribe a maximum in terms of the bank rate. It is a method which would be appropriate in cases where the rate is wanted for short terms, but in an operation of this kind the capital is locked up in factories and immobilised for a term of years and possibly for a very long term.


I would suggest to him for his consideration that a far better comparison as regards rate of interest would be that obtainable from investments at a long-term rate. We wish to give the Commissioner a free hand in this matter so that the best results can be obtained in the promotion of industry in those new areas. I would ask the Committee not to accept the Amendment but to retain the proviso as it is.

11.11 p.m.

Mr. H. Macmillan: The arguments my right hon. Friend the Minister of Labour has put forward are not applicable to the terms of the Proviso. He says that all sorts of things are to be taken into account such as the kind of factory, the length of the term of the lease and long or short-term interest. But the words stated in the proviso are "a reasonable rate of interest on the sums expended." That has nothing to do with the length of the lease. It does not relate to any of those considerations which the Minister has mentioned. There is nothing in the proviso about long or short-term credit or all those interesting monetary considerations which my right hon. Friend has advanced with his usual force. I want to make sure that it is the intention that the rent charged shall be a rent in conformity with the lowest rate at the time.

11.13 p.m.

Sir Stafford Cripps: This illustrates the dangers of rushing ill-considered legislation through this House without any proper opportunity for consideration or amendment. From what the right hon. Gentleman the Minister of Labour has said he does not appear to have the least appreciation of what is contained in the Clause and the hon. Gentleman who proposed the Amendment equally seems to have misunderstood. There are really two matters in this proviso. The rent reserved by any lease granted has got to be such as will produce a return. There is the rent reserve and the return. In arriving at the return, one would no doubt take into account and deduct from the return such things as the right hon. Gentleman suggested—allowances for empties, the amount to be spent on repairs and various things of that sort; but having deducted them, the Commissioner then has to say—and he must do it, because the word in the Clause is "shall"—whether that return which he

so calculates will be as nearly as may be equivalent to—what? To a reasonable rate of interest on the sums expended by him in providing the factory. The reasonable rate of interest has regard to the money expended by him in providing the factory. What we naturally want to know is what is to be considered as a reasonable return upon the money expended by him in providing the factory. Of course, the word "reasonable" does not mean anything. It merely means that the Commissioner may charge whatever he likes. The Commissioner is the sole judge, and whatever he likes to say is reasonable, is reasonable.
I suggest to the right hon. Gentleman that there should be some much closer definition than that when one is dealing with the proper rate of return upon money provided by the Commissioner. It is that which, in fact, is being dealt with here. Clearly it should be dealt with in terms which will define it by the rate of interest above that which is paid by the Government upon the money supplied to the Commissioner—how much more interest he may charge than they are paying. That is a reasonable criterion, because it would then measure the amount that he would be able to make by interest on this investment, having already, before arriving at that rate of interest, made all the proper allowances from the rent merely to reduce it to a rate of interest on the money to be invested. I hope the hon. Member will not withdraw his Amendment unless a satisfactory answer is given by the right hon. Gentleman.

11.18 p.m.

Mr. James Griffiths: The right hon. Gentleman spoke very quickly, and I think the Committee would find it convenient if he would speak more slowly when explaining these matters. I wish to put a question to him in an attempt to bring some order into this matter. I presume that among the factories so to be let by the Commissioner will be the factories set up in trading estates, and that therefore the term "voids" which he used may refer to a trading estate in which there is a number of factories. I gather that, taking a trading estate where there is a number of factories, if some of the factories are let, the charge is to be passed on as part of the rent for the factories that are left, and that there is no possibility of one factory being let in


a trading estate, and the man who takes that factory having to bear as part of his rent the charge for two or three others that may be empty. The rent is to be limited to the money expended by the Commissioner in providing the factory. He provides the trading estate. If he provides four factories and one is let, the amount of money expended in providing that factory includes money spent in providing the whole of the estate and the whole of the services of the estate. The right hon. Gentleman should state more clearly what is meant by "empties" and "voids" in regard to passing on that charge to the factories that are left.

11.21 p.m.

Mr. Shinwell: May I draw the right hon. Gentleman's attention to the several operations contained in this Clause? It is intended that the Commissioner should expend sums in providing factories. That is the first transaction. He then has to fix a rent. Following on that, he has to anticipate a return on the money expended, and he fixes a reasonable rate of interest. That being so, it having a simple operation, is there any reason why the right hon. Gentleman should demur from fixing an arbitrary rate? If he refuses that proposition it is clearly left to the Commissioner in his own discretion to fix what interest rate he pleases. The transaction must be the same in every case, irrespective of the size of the factory, its location, the rent to be charged and the amount to be expended. These factories do not affect the amount of interest to be charged. Why should there be any vagueness? Why should the matter be left in the discretion of the Commissioner? The intention behind this Clause, as it is the intention behind several other Clauses, is to provide a sufficient inducement to manufacturers to occupy factories on these estates. Is it a sufficient inducement to manufacturers if they have to take account of varying rates of interest. Surely it is a much better inducement if they know the rate of interest and the rent they are called upon to pay having regard to the amounts spent by the Commissioner in the first instance. The intention of the hon. Member for Stockton-on-Tees (Mr. H. Macmillan) is that the rate should not be fixed in a reasonable sense, which means that it will be within the discretion of the Commissioner and may be subject to many con-

siderations which are entirely irrelevant to the main purpose of the Clause, but to fix a rate which is not too high to deter manufacturers from occupying these factories. In these circumstances, because the Clause is badly worded, because too much discretion is left to the Commissioner, and because it is desirable that manufacturers should have some definite knowledge of the rates of interest, the Amendment is a reasonable one.

11.25 p.m.

Mr. E. Brown: Surely the arguments of the hon. Member are contrary to the whole of the arguments which have been put forward by hon. Members opposite for the last two years. The argument has been that the powers of the Commissioner were too circumscribed and limited, that he had to go to this, that and the other Government Department—to the Ministry of Transport, to the Ministry of Labour and to the Treasury—and in consequence was not able to get on with the work. It is to meet that case that this Clause has been drafted—and not only this Clause, though I must not widen the scope of the discussion, because I do not wish to obstruct the passage of my own Bill, having had too much practice in that as a private Member. The hon. and learned Member for East Bristol (Sir S. Cripps) was well aware of the force of my contention, because he not only said in his cheery way that the Minister did not understand the proviso but that the Mover of the Amendment did not either. The whole purpose of drafting the Bill in this way is to do the very thing which the House has asked for over and over again, to make quite sure that the Commissioner has discretion, as he has under some Clauses about the rates and taxes, to use his judgment in a reasonable form to get the best results. It might be that the judgment of the Commissioner as to what is necessary to attract an industry in one place would be quite different from what it would be in another place within the same part of the Special Area. I have already pointed out with regard to the Commissioner getting a reasonable rent, what the hon. and learned Member admitted by implication to be accurate, that he would have to have regard to the varying factors which I mentioned in my reply. I would say in reply to the hon. Member for Llanelly (Mr. j. Griffiths) that this Clause does not affect or control the rent charged on the trading estates, be-


cause it applies only to factories let direct by the Commissioner. It gives him a power which he has not had under the existing law. To arrive at what is a reasonable rate of interest on the sums expended regard must be had to the considerations which I have mentioned, and the Government came to the conclusion that the best way to exercise this unorthodox method of inducing industries to go to individual factories outside the trading estates was to give the Commissioner discretion to act. As the courts have been able to construe the word "reasonable" in hundreds of Acts of Parliament it can also be construed in this case and the Commissioner will be able to use the proviso wisely to get the best results.

Mr. Attlee: The right hon. Gentleman has proved too much. He has now shown that the proviso is unnecessary and if he wishes to give a free hand to the Commissioner he had better leave it out altogether.

11.30 p.m.

Mr. Maxwell Fyfe: The problem with which the proviso deals is not unanalagous to the problem which the hon. and learned Member for East Bristol (Sir S. Cripps) must have had to consider many times—the problem in an ordinary rating case of defining annual value where, because there is difficulty in getting comparisons of premises, one has to deal with it by substituted premises or the contractor's test. There one finds the figure, as the hon. and learned Gentleman knows, of the value of premises equivalent to those which have been considered. The problem before the Commissioners is to find the rent reserved, and they have to consider other premises. They have to consider the sum to be expended to provide factories. In order to get a return they have to consider what is a reasonable rate of interest on that sum.
I cannot agree with the arguments of the hon. Member for Stockton-on-Tees (Mr. H. Macmillan). In considering the ordinary rating problem, when you have found the value of the equivalent

premises, you then have to consider what would be the rate of interest on the value of these substituted premises. That is an every-day calculation which is done by the rating committee of the court of sessions. They arrive at that rate of interest by considering what sum a person who was putting up the money to pay for the substituted premises would have in mind. The factors which we have in mind are exactly those which have been mentioned—length of lease, chances of the place by occupied and the like.

If, instead of reasonable interest, one were to put it the other way, as to how many years' purchase anyone who was making this investment would want for his money, the problem becomes an easy one. When you have found the number of years' purchase, divide 100 by it and get your rate of percentage. Doing that is merely a short way of saying that you have considered all the relevant factors which I have already mentioned, and the general chance of the investment being a success. The Commissioner, taking the sum advanced as that with which he starts, arrives at what he considers a reasonable sum. I must respectfully point out the difficulty which the hon. Member for Stockton-on-Tees has introduced into the word "reasonable". In the view of members of the public, lawyers create difficulties, but "reasonable" is not a difficulty; it is their sheet anchor. But for the reasonable man, our Common law would have come to an untimely end years ago. The whole conception of English liberty depends upon what the view of the reasonable man would be. I ask the hon. Member to consider this Amendment either from the point of view of the practical problem dealt with in the day-to-day work in the courts, or from the point of view of the word which we lawyers hold in the very greatest respect.

Question put, "That the word 'reasonable' stand part of the Clause."

The Committee divided: Ayes, 179; Noes, 89.

Division No. 148.]
AYES.
[11.34 p.m.


Adams, S. V. T. (Leeds, W.)
Baldwin-Webb, Col. J.
Bower, Comdr. R. T.


Agnew, Lieut.-Comdr. P. G.
Balfour, G. (Hampstead)
Bowyer, Capt. Sir G. E. W.


Albery, Sir Irving
Balfour, Capt. H. H. (Isle of Thanet)
Boyce, H. Leslie


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Barclay-Harvey, Sir C. M,
Bracken, B.


Allen, Lt.-Col. Sir W. J. (Armagh)
Baxter, A. Beverley
Braithwaite, Major A. N,


Anstruther-Gray, W. J.
Beaumont, Hon. R. E. B. (Portsm'h)
Brass, Sir W.


Apsley, Lord
Bird, Sir R. B.
Brown, Rt. Hon. E. (Leith)


Aske, Sir R. W.
Bossom, A. C.
Bullock, Capt. M.


Assheton, R.
Boulton, W. W.
Campbell, Sir E. T.


Astor, Major Hon. J. J. (Dover)
Bowater, Col. Sir T. Vansittart
Gary, R. A.




Castlereagh, Viscount
Haslam, H. C. (Horncastle)
Ramsbotham, H.


Cazalet, Thelma (Islington, E.)
Haslam, Sir J. (Bolton)
Rankin, Sir R.


Cazalet, Capt. V. A. (Chippenham)
Heilgers, Captain F. F. A.
Rathbone, J. R. (Bodmin)


Chamberlain, Rt. Hn. N. (Edgb't'n)
Hepburn, P. G. T. Buchan-
Reid, W. Allan (Derby)


Chorlton, A. E. L.
Herbert, A. P. (Oxford U.)
Remer, J. R.


Churchill, Rt. Hon. Winston S.
Herbert, Major J. A. (Monmouth)
Rickards, G. W. (Skipton)


Clarke, Lt.-Col. R. S. (E. Grinstead)
Holmes, J. S.
Robinson, J. R. (Blackpool)


Cobb, Captain E. C. (Preston)
Hope, Captain Hon. A. O. J.
Ropner, Colonel L.


Colville, Lt.-Col. Rt. Hon. D. J.
Hopkinson, A.
Ross Taylor, W. (Woodbridge)


Craven-Ellis, W.
Home, Rt. Hon. Sir R. S.
Russell, A. West (Tynemouth)


Crookshank, Capt. H. F. C.
Hudson, Capt. A. U. M. (Hack., N.)
Russell, S. H. M. (Darwen)


Crowder, J. F. E.
James, Wing-Commander A. W. H.
Salmon, Sir I.


Davidson, Rt. Hon. Sir J. C. C.
Joel, D. J. B.
Salt, E. W.


Davies, G. (Montgomery)
Keeling, E. H.
Samuel, M. R. A.


Davies, Major Sir G. F. (Yeovil)
Kerr, J. Graham (Scottish Univs.)
Sanderson, Sir F. B.


Dawson, Sir P.
Keyes, Admiral of the Fleet Sir R.
Sassoon, Rt. Hon. Sir P.


Doland, G. F.
Lamb, Sir J. Q.
Scott, Lard William


Donner, P. W.
Law, R. K. (Hull, S.W.)
Shakespeare, G. H.


Dorman-Smith, Major R. H.
Leckie, J. A.
Shaw, Major P. S. (Wavertree)


Duckworth, Arthur (Shrewsbury)
Leighton, Major B. E. P.
Smiles, Lieut.-Colonel Sir W. D.


Dugdale, Major T. L.
Lennox-Boyd, A. T. L.
Smith, Bracewell (Dulwich)


Duggan, H. J.
Levy, T.
Smith, Sir R. W. (Aberdeen)


Duncan, J. A. L.
Liddall, W. S.
Spens, W. P.


Dunglass, Lord
Llewellin, Lieut.-Col. J. J.
Stanley, Rt. Hon. Lord (Fylde)


Eastwood, J. F.
Locker-Lampson, Comdr. O. S.
Stourton, Major Hon. J. J.


Eckersley, P. T.
Loftus, P. C.
Strauss, E. A. (Southwark, N.)


Elliot, Rt. Hon. W. E.
Lyons, A. M.
Strauss, H. G. (Norwich)


Ellis, Sir G.
Mabane, W. (Huddersfield)
Strickland, Captain W. F.


Elliston, Capt. G. S.
McCorquodale, M. S.
Sueter, Rear-Admiral Sir M. F.


Emery, J. F.
MacDonald, Rt. Hon. M. (Ross)
Sutcliffe, H.


Entwistle, Sir C. F.
Macdonald, Capt. P. (Isle of Wight)
Taylor, Vice-Adm. E. A. (Padd., S.)


Errington, E.
McEwen, Capt. J. H. F.
Thomas, J. P. L.


Evans, Capt. A. (Cardiff, S.)
McKie, J. H.
Thomson, Sir J. D. W.


Findlay, Sir E.
Macnamara, Capt. J. R. J.
Touche, G. C.


Furness, S. N.
Manningham-Buller, Sir M.
Tryon, Major Rt. Hon. G. C.


Fyfe, D. P. M.
Margesson, Capt. Rt. Hon. H. D. R.
Tufnell, Lieut.-Commander R. L.


Gibson, C. G. (Pudsey and Otley)
Markham, S. F.
Turton, R. H.


Gilmour, Lt.-Col. Rt. Hon. Sir J.
Maxwell, Hon. S. A.
Wakefield, W. W.


Goldie, N. B.
Mayhew, Lt.-Col. J.
Walker-Smith, Sir J.


Gower, Sir R. V.
Mellor, Sir J. S. P. (Tamworth)
Ward, Lieut.-Col. Sir A. L. (Hull)


Graham, Captain A. C. (Wirral)
Mills, Major J. D. (New Forest)
Ward, Irene M. B. (Wallsend)


Grant-Ferris, R.
Morris-Jones, Sir Henry
Waterhouse, Captain C.


Gridley, Sir A. B.
Nicolson, Hon. H. G.
Watt, G. S. H.


Grimston, R. V.
Patrick, C. M.
Wedderburn, H. J. S.


Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)
Peake, O.
Williams, H. G. (Croydon, S.)


Guinness, T. L. E. B.
Peat, C. U.
Wise, A. R.


Hamilton, Sir G. C.
Peters, Dr. S. J.
Wragg, H.


Hannah, I. C.
Petherick, M.



Hannon, Sir P. J. H.
Plugge, Capt. L. F.
TELLERS FOR THE AYES.—


Harbord, A.
Ponsonby, Col. C. E.
Mr. James Stewart and Commander Southby


Hartington, Marquess of
Raikes, H. V. A. M.





NOES.


Acland, Rt. Hon. Sir F. Dyke
George, Major G. Lloyd (Pembroke)
Noel-Baker, P. J.


Acland, R. T. D. (Barnstaple)
George, Megan Lloyd (Anglesey)
Parkinson, J. A.


Adams, D. (Consett)
Grenfell, D. R.
Potts, J.


Adams, D. M. (Poplar, S.)
Griffith, F. Kingsley (M'ddl'sbro, W.)
Price, M. P.


Adamson, W. M.
Griffiths, G. A. (Hemsworth)
Pritt, D. N.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Griffiths, J. (Llanelly)
Ritson, J.


Attlee, Rt. Hon. C. R.
Groves, T. E.
Roberts, W. (Cumberland, N.)


Banfield, J. W.
Hall, J. H. (Whitechapel)
Rothschild, J. A. de


Barnes, A. J.
Harris, Sir P. A.
Rowson, G.


Barr, J.
Hayday, A.
Selley, H. R.


Batey, J.
Henderson, J. (Ardwick)
Sexton, T. M.


Bellenger, F. J.
Holdsworth, H.
Shinwell, E.


Bevan, A.
Hopkin, D.
Simpson, F. B.


Brooke, W.
Jagger, J.
Smith, Ben (Rotherhithe)


Buchanan, G.
Jenkins, A. (Pontypool)
Smith, E. (Stake)


Burke, W. A.
Jenkins, Sir W. (Neath)
Smith, T, (Normanton)


Cassells, T.
Jones, A. C. (Shipley)
Stephen, C.


Charleton, H. C.
Jones, Morgan (Caerphilly)
Stewart, W. J. (H'ght'n-le-Sp'ng)


Cocks, F. S.
Kelly, W. T.
Strauss, G. R. (Lambeth, N.)


Cripps, Hon. Sir Stafford
Kirby, B. V.
Taylor, R. J. (Morpeth)


Daggar, G.
Lawson, J. J.
Tinker, J. J.


Dalton, H.
Lee, F.
Watson, W. McL.


Davidson, J. J. (Maryhill)
Leslie, J. R.
White, H. Graham


Davies, R. J. (Westhoughton)
Lunn, W.
Whiteley, W.


Dobbie, W.
Macdonald, G. (Ince)
Williams, E. J. (Ogmore)


Dunn, E. (Rother Valley)
McEntee, V. La T.
Windsor, W. (Hull, C.)


Ede, J. C.
MacLaren, A.
Woods, G. S. (Finsbury)


Edwards, Sir C. (Bedwellty)
MacMillan, M. (Western Isles)



Foot, D. M.
Mathers, G.
TELLERS FOR THE NOES.—


Frankel, D.
Maxton, J.
Mr. Harold Macmillan and Mr. A.


Garro Jones, G. M.
Milner, Major J
Edwards.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

11.43 P.m.

Sir S. Cripps: I cannot refuse the invitation of the hon. and learned Gentleman who spoke last to say a word on the form of this proviso. He sought to liken it to an assessment from rateable value and, of course, it is an absolutely and completely different proposition. Anyone who wished to make the task of the Commissioner similar to that of fixing the rateable value could quite easily have done it but he would have done it in different words. The right hon. Gentleman misrepresented what was my intention and what I thought I said, and what I think will appear in the OFFICIAL REPORT. What the Commissioner has to do primarily is to see that the rent reserved by any lease that he grants is of such a size as in his opinion to produce a return that is equivalent to something. It is obviously the intention of the Clause that the final equivalent of the return shall be something which is a standard, because that is the only standard by which the Commissioner can operate, and presumably it is the intention that a similar standard shall be utilised by Commissioners over the whole country. That is to say, it is not desirable that one Commissioner should consider 5 per cent. a reasonable rate and another 3 per cent. as a reasonable rate in England or Scotland, but that they should both consider the same figure to be a reasonable rate.
It is not really a matter which is intended to be determined by the discretion of the Commissioners as the Clause stands, nor is there any criterion laid down by which one can judge "reasonable." Generally, where you have "reasonable" used there is some criterion by which you are able to judge "reasonable." Looking at this Clause, how is anybody to know what is to be taken into account as regards the rate of interest so as to ascertain whether it is reasonable? Is Mr. Montague Norman to be the test of reasonableness, or is a joint stock bank to be the test, or is the current rate of industrial equity to be the rate of reasonableness? What is intended? If the right hon. Gentleman were giving instructions to the Commissioners what would he tell them as regards judging the rate of interest, which is to be some figure at which they are to arrive? What would

he tell them that they are to regard as rent likely to
produce a return as nearly as may be equivalent to a reasonable rate of interest on the sums expended by him in providing the factory.
First, you have your gross rent and your return is to be equivalent to the reasonable rate of interest. What is it that the Commissioner must have regard to in advising himself whether he is to fix the figure at 5, 4 or some other per cent? He has to fix ft at an actual arithmetical figure. So far as I can see, this proviso is not giving him any assistance in arriving at such arithmetical figure. The suggestion made in the Amendment, if it had been taken into account with the other Amendment, was that the arithmetical figure should be put in at one per cent- over the bank rate. That would have given the Commissioner some test by which always he could judge, but as the proviso reads at present it does not give either the Commissioner or anybody else any assistance whatsoever in judging of the rate of interest in regard to which he is to fix the rent.

11.49 p.m.

Mr. Bevan: In resisting the Amendment the right hon. Gentleman said that my hon. Friends were departing from the position we have taken up for two years in demanding as much elasticity as possible for the Commissioners. He desired the language of the Clause to go through unamended because he said the Commissioners would be given wide discretionary powers. It is precisely because this language does give to the Commissioners too wide discretionary powers that we are anxious to get some sort of interpretation. If the Clause was so drawn and if those powers were being conferred on the Commissioners in order that they might establish factories in the distressed areas, then we should be only too ready to allow the powers to go through, but, to be quite frank, our experience has taught us that those powers are never properly used. As a matter of fact, they are simply put before Parliament as a sort of red herring to persuade us that something is to be done. When in fact nothing is to be done. He said that if we put a figure in of 1 per cent, above the Bank of England rate, that would impose a limitation on the discretion of the Commissioner. There is


nothing to prevent him making that a maximum figure.

Mr. J. Griffiths: Not more.

Mr. Bevan: Not more than 1 per cent. It would be possible for him to charge less than 1 per cent. So that the right hon. Gentleman resisted the Amendment on entirely false grounds. There is a further point which I should like to make. I should think that the assessment committees would find themselves in great difficulties in assessing the rateable values of these factories. Are they to base the assessment on the rent actually charged by the Commissioner or what they themselves consider to be reasonable in the circumstances? But that is a refinement of the position, and I will not press it.
In his speech on the Second Reading of the Bill the Minister said that he had received telegrams from many parts of the country expressing concern that inducements offered to private enterprise to establish factories in the distressed areas would operate unfairly against similar enterprises in other parts of the country, and we suspect that the reason why the powers of the Commissioner are not more narrowly drawn in the clause is in order to expose the Commissioner to the pressure of rival interests in other parts of the country. For example, let us suppose that a factory has been let by the Commissioner in South Wales and the factory can be used to produce biscuits, tyres, artificial silks or any commodity of that sort which is being produced in some other part of the country. Now there is no hon. Member who would suggest that in addition to the ordinary task of establishing light industries in the distressed areas we are to have the task of providing industries, which do not already exist, in any other part of the country. In the ordinary course of events the industry that would be established in a distressed area would be an industry in competition with an industry already existing in another part of the country, and we suspect that we should be in this dilemma, that if the inducements offered by the Government prove sufficiently substantial as to attract industries to the distressed areas they will be sufficiently successful as to excite strong opposition from their rivals in other parts of the country. If they are not sufficiently successful as to induce

the establishment of industries in the distressed areas the purpose of the Bill is defeated.
Therefore, if we are to assume that the right hon. Gentleman is serious in his desire to use this Bill for the establishment of factories in the distressed areas, we have to make the further assumption that the inducements under this Clause are sufficiently successful as to attract industries there in competition with industries in other parts of the country and to excite the opposition of rivals in other parts of the country. If these are the circumstances ought not the Commissioner to be protected from the importunities of manufacturers in other areas? If you say "No," then obviously, you are not going to have factories established in the distressed areas. The reason why factories are not being established in distressed areas is because it is not economically attractive.

Commander Bower: For once I find myself in complete agreement with the hon. Member.

Mr. Bevan: I hope to carry the hon. and gallant Member with me a little further, although I admit that I may be taking on a parliamentary Old Man of the Sea. If it is intended that the Clause is to afford sufficient financial inducement to persuade employers to erect factories in distressed areas, then it will be so substantial as to excite the opposition of manufacturers producing the same class of goods elsewhere, and therefore the Commissioner should be protected against the pressure of these rival interests. How will that pressure be exercised? If the Clause is unamended, and if the Commissioner is to be allowed elastic powers in determining the rent of a factory, then he will be subject to the pressure of these rival interests, and we know how powerful and influential these commercial interests are from the speech which the Chancellor of the Exchequer in winding up the previous Debate. These rival interests will cause the Commissioner to put the rent so high as to reduce the inducement which he desires to give to factories to establish themselves in distressed areas.
This legislation justifies all our suspicions. Considerable powers are vested in the Commissioner and they have never been exercised to any considerable extent. Unfortunately we are in this difficulty


that unless we can find new industries for the distressed areas we are merely trying to attract industries which would otherwise be established elsewhere. Surely we should do what we can to protect the Commissioner against any private, subterranean and clandestine pressure by rival interests. I have heard various expressions by people outside. They say that they never know what rent the Commissioner is going to charge, and in considering what is a reasonable rent he will find himself in this dilemma that in many of the distressed areas there are no factories which will enable him to make a comparison.
I know of no artificial silk factory or tyre factory in South Wales, so that the Commissioner, in arriving at a criterion of a fair rent, will have to leave the distressed areas and take the rent charged for other factories of a similar kind in some other part of the country. What is to be a reasonable rent in such circumstances? If it is proposed to set up factories for the production of wireless cabinets, for instance, in the Rhondda there are no similar factories there to form a criterion. Will he have to take as a reasonable rent the rent charged for a wireless cabinet factory in the Great West Road? If not, how can he arrive at a reasonable rent? The Minister has told us that the rent must be fixed according to the rents of similar factories in the neighbourhood. In these circumstances, the term neighbourhood must extend to the whole country and the Great West Road.
It therefore follows that the Commissioner will let factories in the Rhondda on the conditions governing those in the Great West Road. It is unreasonable to expect factories to be taken in these circumstances unless he imposes a lower rent. If he does that, the manufacturer in the Great West Road will ask the Government "What right have you to use my money as a taxpayer to subsidise my rivals in the Rhondda?" The mind of the Government being what it is, that is the sort of argument to which they will succumb, and there will be no factory in the Rhondda. The Government should, therefore, embody in the Clause some language which will protect the Commissioner against the importunities of private enterprise. Unless they do that the Clause will be valueless, and like all

the other Special Area schemes of the Government, will prove of no value.

12.5 a.m.

Mr. E. Brown: The hon. Member for Ebbw Vale (Mr. Bevan) makes assumptions to suit himself and then, with the gift of rhetoric, proceeds to make a case to his own satisfaction. He has entirely overlooked the fact that, in addition to this provision, which gives the Commissioner power to let a factory at an economic rent to persons carrying on a business for private gain, he has another power. He can, under another part of the Bill, make a contribution towards the rent where it will be to the advantage of a necessitous district for him to do so. The Bill gives the Commissioner a discretion to act in the light of his own experience, and knowing the desires of this House to induce manufacturers to go into those parts of the Special Areas which are most badly in need of new industries. It is interesting to observe the complete change of attitude of the hon. Member for Ebbw Vale. He said previously that the Government's proposals were negligible and niggardly. He now says we are giving the Commissioner considerable powers and that he may be subject to pressure from outside. We know they are considerable powers, and we know that he is a reasonable man, that he will do his best for the Special Powers concerned, and that he is not likely to yield to outside interests. The proviso in this Clause is in terms which are well known in law and in practice. The Clause is one which the House will wish to pass to give the Commissioner this power, and the hon. Member for Ebbw Vale should consider the other provisions contained in the Bill.

12.8 a.m.

Mr. Shinwell: When we were discussing Clause I it was indicated that we had no right to consider the Bill as a whole. It was pointed out that we had to consider each Clause as presented to the Committee. That is what we are doing. The right hon. Member the Minister of Labour has apparently overlooked that fact. He has used as his principal argument against my hon. Friend the Member for Ebbw Vale (Mr. Bevan) the fact that there are other provisions in the Bill. When we come to those provisions we shall have something to say. But, for the moment, we are concerned with the simple proposition that the Com-


missioner may let factories to manufacturers and make arrangements with regard to rents to be paid and the interest to be paid on the moneys expended. Having regard to that, I wish to address one question to the right hon. Gentleman the Minister of Labour: Where are the factories which the Commissioner proposes to let? Are these factories already in existence or has the right hon. Gentleman in mind the factories intended to be erected at some time, no time being specified, perhaps in the dim and distant future, on the trading estates. If, having regard to the determination of the Government to press the Measure through the House, we are expected to assist in making it a workable measure, then clearly we ought to be satisfied as to the precise meaning of the provisions now before the Committee.
We are, therefore, entitled to inquire where those factories are. It may be the right hon. Gentleman has in mind—and if so, he ought to be specific in his utterances—existing factories in the Special Areas which are not at present being utilised. Are those the factories he has in mind, or are we to discover several months after this legislation has been placed on the Statute Book that the Commissioner is to be engaged scouring the Special Areas searching for the factories provided for in this Bill? We are entitled, having regard to the special difficulties of the areas with which we are concerned, to have definite information on that point. The right hon. Gentleman the Minister of Labour seemed to make light of the argument presented by my hon. Friend the Member for Ebbw Vale, and, I submit with respect, did not seem fully to appreciate the point of substance contained in my hon. Friend's speech. Let me, therefore, draw his attention to the Third Report of the Commissioner for the Special Areas. On pages 10 and 11, under the heading of "State-provided Inducements"—more particularly on page 11—the Commissioner directed attention to the need for providing various inducements in order to attract industry to the Special Areas, but he had in mind this possibility, that new industries might be attracted to those areas and enter into competition with existing industries of a similar character, and he was anxious to prevent such competition. The Commissioner said on page 11:

If it could be demonstrated to the satisfaction of some impartial tribunal that a new industry attracted thereby to one of the Areas would seriously prejudice the prospects of an industry already there established and producing the same type of goods, equivalent concessions should be applied to the existing industry.
I am not certain that that is the intention of the right hon. Gentleman.
I will give an illustration, referring particularly to an area with which I happen to be acquainted, Durham County. Let us assume that there is in the area of Sunderland an industry, covering perhaps two or three factories and two or three separate concerns, which is relatively flourishing, has no need of special assistance and requires no special inducement to carry on. Let us assume that a manufacturing concern producing the same kind of article decides, because of the inducements offered, to take advantage of the provisions contained in this Clause, namely, to occupy a factory provided by the Commissioner either on the trading estate—I am not clear as to whether the factories are to be on the trading estates—or elsewhere. Supposing that such an industry is attracted to the Team Valley Trading Estate, is it not likely that the business concerns in the Sunderland area, having regard to the inducements offered, will transfer their undertakings to the Team Valley Trading Estate?
What is to be the effect of that transference? I had understood that it was the intention of the right hon. Gentleman to provide relief not for one part of a Special Area, but for all parts. What is to be the effect on the Sunderland area if existing business concerns leave that area and go to the Team Valley Trading Estate? It would be advantageous to the Team Valley area, but certainly it would not produce benefits to the Sunderland area. I ask the right hon. Gentleman to express his views on this matter, as I think possibly it is a dilemma. He may have some simple device to remove the difficulty which I can foresee, but unless he has, there are grounds for perturbation with regard to the possible effects of this provision, if it is not amended, on the Special Areas.

12.19 a.m.

Mr. E. Brown: With regard to the hon. Member's first question, this Clause has nothing to do with trading estates, but


with factories elsewhere than on trading estates. The answer to his question is that the Commissioner is given power if he decides that he desires to induce industry to go to a certain place where there is, for instance, an empty factory, to acquire that factory, to repair it, if need be, and to let it to a firm. Or, if there is no factory, he is given the power to provide one in that particular place. It is because the Special Commissioner, in his Report, pointed out that there was a need, not only for trading estates of a large nature, but for more individual industries which might help smaller towns, that the Bill was drawn in that way.

Mr. Shinwell: The right hon. Gentleman said the Commissioner had power, not only to let a factory but to provide a factory if there was not one there already—to clear a site and build a factory. Where is the provision to that effect in this Clause?

Mr. Brown: The provision is not merely in this Clause. This Clause must be read with all his other powers—with Clause and with the Act of 1934. The hon. Member is making a mythical dilemma. He is trying to establish that the Commissioner will not have these powers but the Commissioner will have them. That is the intention. Further, there is the issue which has been raised by several hon. Members from other parts of the Special Areas and from districts like Tees side. The difficulty which they have brought forward is, I am afraid, inherent in the policy which we have accepted. We have accepted a policy of deliberately weighting the balance in favour of particular areas. In doing so, as this Debate has proved, we seem to have been very successful. Now it appears to the hon. Member for Seaham (Mr. Shinwell) is only afraid lest we may have made the magnet so powerful that it may be unfair to other areas. We are prepared to take the risk.

Sir S. Cripps: Will the right hon. Gentleman answer, if he can, the question which I put to him. What is the criterion of reasonableness as regards the rate of interest which the Commissioner is to take into account.

Mr. Brown: I have already given the answer on the Amendment which the Committee has just rejected. It is de-

fined here, as what is reasonable in the Commissioner's opinion and I can add nothing to that definition.

12.23 a.m.

Mr. J. Griffiths: I have already asked whether the conditions which the right hon. Gentleman enumerated applied to trading estates and I gathered from the reply that the trading estate was a separate thing altogether, dealt with in the principal Act. My recollection is that the Commissioner's only power under the principal Act was that of establishing trading estates. There was nothing in that Act to enable him to provide single factories. This Clause refers to the Commissioner letting factories and the Minister has said that the Commissioner may take an empty factory and let it on the conditions already indicated. But we know that there never have been any factories worth speaking of in the Special Areas. They are largely coalmining areas. In South Wales, apart from the towns and districts where there are tinplate mills which might be converted into factories, where is there a factory? Inside the Special Area as now defined, I do not know one and I know those valleys pretty well. Therefore I ask what is the position if the Commissioner is, say, desirous of attracting some manufacturer to establish a factory in the Rhondda or in Merthyr? If hon. Members opposite have been to Merthyr have they seen an empty factory? There is only the disused Dowlais steel works, and it cannot be suggested that even the £2,000,000, the total amount the Commissioner will have, would be sufficient to convert those works into a factory. If the Commissioner is to attract industries there he must build factories and that only makes the financial provisions of the Bill look more absurdly inadequate than ever.

Mr. E. Brown: The hon. Member is wrong. The £2,000,000 has no relation to this purpose. The Commissioner is unlimited as to the amount he can spend for this purpose. I will answer the first part of the question by calling attention to the definition of a factory in Clause 7 the interpretation Clause, which makes it plain that what I said just now was strictly accurate:
'Factory' means premises suitable for occupation as a factory or workshop as defined by the Factory and Workshop Acts, 1901 to 1920, and means also a site for such premises.


If there is a suitable factory he can acquire it, and if there is not he can build one.

12.29 a.m.

Mr. H. Macmillan: The position seems to me as it did to Alice in Wonderland, to become "curiouser and curiouser." The Minister justifies his objection to an Amendment limiting the rate of interest by pointing to Clause 3. I understand him to say the position is that the Commissioner can either acquire a factory or build one—that there are powers to build in the original Act, though I confess that I cannot find them there, and should be glad if the right hon. Gentleman would point them out. Having done that it is the duty of the Commissioner under this proviso to let it at a rent which provides a reasonable rate of interest, but then, says my right hon. Friend, the Commissioner can, under Clause 3, make a contribution towards that rent. The Commissioner is to fix the rent under Clause 2 and then can say under Clause 3 "I will let you off half the rent."

Mr. E. Brown: He has complete power to vary the inducements according to the particular needs, as he conceives them, of that section of the area.

Mr. Macmillan: That is a very helpful statement, because if that be so it seems to me the proviso is wholly unnecessary. Why should we tie a man down to exact a certain rent and in the next Clause say "Oh, but you need not do that if you don't want to. It is entirely in your discretion"? First you give a discretion to rack rent and then a discretion to lower the rent. First he is ordered to get all he can and then told not to take more than is reasonable. I still wish that my right hon. Friend had given us what he conceives to be a criterion of reasonableness in this matter. I know that we are left here to discuss these important matters at a late hour when all the more important colleagues of the right hon. Gentleman have gone away. That always happens to private Members who have to carry on these proceedings; but I should have thought that on this particular day, after all the questions of high finance which we have been considering, we should have had some guidance on what is regarded as a reasonable rate of interest. Whose view is taken? We

have had a series of Commissioners—some have been City men—and perhaps the present Commissioner has his own view. I quite understand that allowance is made for repairs, and so on, but I want to know upon what criterion this proviso presumes that what is fixed is reasonable. Does a reasonable rate mean that he should fix it according to what any landlord would be likely to fix for any comparable property? Or does it mean at a rate of interest which takes into account the fact that he is using Government money raised on the market at a lower rate? We have had many of these cases. We have had great funds to support such works by using the power of the Government to borrow at a lower rate of interest than the market rate. We have used it to build the "Queen Mary" and all kinds of extensions of great undertakings. Is this power to be taken into account in fixing what is a reasonable rate? In comparison with what is the Commissioner to fix it? What the right hon. Gentleman tells us is that he is first to have regard to this proviso and then, if he wishes, he is to have no regard to it under Clause 3. It would be much better drafting to leave out the proviso altogether and to deal with it under Clause 3.
I would still like a further explanation from the right hon. Gentleman as to why it is necessary to have this proviso in the Bill at all. If he has power to buy, to build or to let a factory and to let it at any rent he likes, why have this proviso as to reasonable terms? It is a vague and uncertain phrase, not necessarily related to the ordinary competitive market rate which any landlord might fix, and one which is wholly invalidated by the operation of Clause 3. Therefore I Would again suggest it would be much better drafting to omit the proviso and to go on either to-morrow or some other day with the consideration of Clause 3, when the Committee would be in a position to pay more acute attention to it than we can do after an exhausting day on the Budget.

12.33 a.m.

Mr. MacLaren: I intervene for a few moments because the discussion has really landed the Committee into a hopeless position. I heard the right hon. Gentleman say a minute or two ago that land was going to be leased at


an economic rent. [HON. MEMBERS: "No!] I am within the recollection of the Committee. The right hon. Gentleman said distinctly that a factory was to be let at an economic rent. I will give way if he wants to correct that.

Mr. E. Brown: Clause 2 enables me to do that.

Mr. MacLaren: The right hon. Gentleman says the Clause enables him to charge an economic rent for the factory. Let us look at the proposition in terms of economics. In this debate so far we have had, first of all, something about the economic rent and something was said about the next Clause which would make it possible for the owner of a factory to let it at an economic rent. It is really a waste of time to talk about rates of interest. The question concerns the use of a site and the building on it and what rent is chargeable for the use of that property. That is the question, and I notice the Minister fell hopelessly into a trap and said "Oh, yes, but the rent is one thing and the rate of interest will be quite another because that is within the discretion of the Commissioner". First there is the economic rent and then the rate of interest, but let us look at the Clause, which says:
Provided that the rent reserved by any lease granted under this Section shall be such as, in the opinion of the Commissioner, will produce a return as nearly as may be equivalent to a reasonable rate of interest",
I hope the Committee will take note of that. It is not even to be a reasonable rate, but as nearly as may be. That means, think of a number and take away the number you first thought of, and the answer is a lemon. It is not even a reasonable rent, but as near to it as you can get. That is the meaning of this nonsensical language in the Bill, so you can see how the Minister is hopelessly in a fog. He says "We are not giving factories away; we are going to give them at a reasonable rent," and, sotto voce, he says "We will help you to pay it." And then he says "This provision is in the discretion of the Commissioner." It is to be reasonable but not too near reasonable.
Then the Minister says that they are to give a grant to pay the money. That brings us to another point, the suggestion that the economic rent is to be subsidised;

it is, that the rate of interest, according to the proviso, shall be in the discretion of the Commissioner. Looking at it as an economic proposition here is a site with a factory on it. We will not discuss for the moment where it is situated—whether in the north, south, east or west. This site will have what is termed by the Minister an economic rent, that is, some sum which is an annual charge placed against the person who uses the site. I should like to put to the Minister and to the Committee certain considerations that must affect the rental procurable from that site. First of all, you will ask yourselves: Is this site adjacent to certain facilities? Is it near the river and has it good transport services and good roads? This is not a joking matter; I am putting it forward quite seriously. The whole Committee will agree that certain considerations govern any person who enters in upon a site—its suitability as to public services and whether it is contiguous to full facilities. Suppose I go into a distressed area and, according to the Minister's statement to-night, there is a factory standing there. What will I have to put on the board above the factory, assuming it is vacant? "Factory to be let" and then "You nominally have charged an economic rent but you do not pay it." There is a nominal rate of interest at the discretion of a gentleman, and then the words "Thank God you have got the Commissioner." In fact, anyone who applies for the use of this building will pay no rent, no rates and indeed he will pay no Income Tax. That is the position. If you look at Clause 3—

The Deputy-Chairman: We are discussing Clause 2.

Mr. MacLaren: I am very serious about this; I am not in the least being frivolous. It is a serious matter, when the Government offer such a Bill to this House, and seek its vote and challenges the country to judge as to its wisdom and statesmanship, that they should utter such nonsense as is in this Bill. What is the economic value of the site—

The Deputy-Chairman: The Minister only raised the question of rate. If the hon. Member starts a discussion under Clause 3 we shall not be able to re-raise it on the Question, "That Clause 3 stand part of the Bill."

Mr. MacLaren: The question on the proviso is that the rate of interest shall bear some resemblance to the rent, or the rent some resemblance to the rate of interest, as nearly as may be. That is what we are discussing. I cannot see how it is possible to discuss it. How can I possibly discuss the economic value of the economic rent of a site unless I discuss what advantages attach to that site? That is why I am forced to bring into the discussion what are the advantages attaching to the site offered under this Bill? I say that the advantages attaching to a site in the distressed areas under the Bill are such that the economic rent would be 100 per cent. more than you would get for any other site in the country. There is no site outside the distressed areas, once this Bill is in operation, in which a man entering into it will not have his Income Tax paid. He will have his rates and rent paid, and I suggest that the economic value of that site is enormous, considering the advantages that will attach to the site under the Bill. It is sheer, fatuous nonsense. Why not be plain and blunt and take this proviso out, for really it means nothing at all. What is the good of saying to me: "You come to the distressed areas and we will give you a factory at an economic rent which you do not need to pay?".
Further, I hope that those who are supporting this Bill, and some of those who are protesting against it will remember some of the Debates that gave rise to the wording of this Clause. I never knew of such nonsense as that to which I had to listen from time to time in this House—attracting industries here, and putting them there. Protests are going on as to why enterprises are centring around London and not in the distressed areas. The facts are staring everybody in the eyes, including the Commissioners who went there. They are that the rates, and the disadvantages of old roads and such matters were causing these factories to go elsewhere. In order to circumvent a vicious rating system that is making the industry of the country impossible you come to a proviso of this kind: that if you come to the distressed areas we agree to give you certain advantages, which on the very face of it makes a contradiction.
I heard the Chancellor of the Exchequer say earlier to-night that he did not think there would be profiteering in armaments because of competition. I should like

to know from the industrialists who may vote for this what are their competitive chances against a gentleman who is competing with them in your industry under this Clause and succeeding Clauses? To raise this whole discussion about a rate of interest which must be related to the rent is a sheer waste of time, and I consider it would be well worth the Governments time taking this proviso out entirely and saying quite bluntly, as they say in the succeeding Clause, that anyone who will come and confer upon the people in the distressed areas work—and why working men want work, I never could understand. This idea that working men want work—

The Deputy-Chairman: I really do not think that arises on this Clause.

Mr. MacLaren: It is very necessary in winding up my remarks to bring them to a close upon this theme, that anyone who confers upon the distressed areas work, labour, will get everything he wants for nothing at the expense of the other taxpayers and his other competitors in industry in the country. However, I suppose it is all part of a piece, and I hope, Captain Bourne, that having remained strictly in order, you will allow me to say something on Clause 3.

Mr. Lennox-Boyd: I will not keep the Committee a moment, but I would like to ask the Minister one question. By what clause in the principal act has the Commissioner power to build a factory?

12.44 a.m.

Mr. E. Brown: The question of Trading Estates was raised. Under the principal Act the Commissioner has power to initiate measures for the economic development of the Special Areas. This covers the provision of factories. Hitherto factories have been provided on Trading Estates by Trading Estate Companies to which the Commissioner has given financial assistance. The new Clause will enable the Commissioner himself to let factories to undertakings carried on for gain.

Mr. Kingsley Griffith: I do not quite understand the last reply of the Minister, because some of us have been trying to compare these two Acts and to find out where this power is. I cannot find any power in the words which the Minister used quite recently when he told us that


the Commissioner had power to build factories and then let them. That does not seem to me the same answer as the Minister has just given to the hon. Gentlemen opposite. That point perhaps will be answered more fully to the hon. Gentleman who asked it. I only rise to ask one other question because it is very late and I am very muddled by the whole of this Debate. If a landlord charges a rent and that rent has got to be a reasonable rent, and then if under another clause he has got power to pay the tenant the money to pay himself rent, then who has the rent in that property in the end? Can you be said to charge a rent, half of which you pay to yourself?

12.47 a.m.

Mr. R. Assheton: This seems a very simple point which it appear to me does not need much elucidation. I note that the hon. and learned Member for East Bristol (Sir S. Cripps) and the hon. Member for Stockton (Mr. Macmillan) and various other Members, have great difficulty in understanding the Clause, but it seems to me that it is very well drafted indeed. The proviso is quite clear. It provides that the Commissioner shall let the factory at a reasonable rent. The next Clause, which allows a rebate of rent only, allows that rebate to run for five years, and therefore it is quite clear that unless the rent is fixed in the first instance it will be impossible for the prospective manufacturer to know what his position will be in five years.

Mr. MacLaren: There are remissions provided for. Would you add the capital value of the remissions under the letting of this factory to your economic rent?

Mr. Assheton: No, I should not.

Mr. Cartland: I have one question about this power to build factories. I am sorry if I am dense about this, but am I right in supposing that the Commissioner has no powers to build a factory except on a trading estate?

Mr. E. Brown: The answer is, of course as I said, that having regard to Section 1 of that principal Act, in conjunction with this Bill, he has that power. He has power—if my hon. Friend will turn to Section 1 of that principal Act—to carry out a scheme of economic development and under that he could build a factory.

Mr. Gartland: Anywhere?

Mr. Brown: In conjunction with this power given under Clause 2.

12.50 a.m.

Mr. Shinwell: May I ask whether the provisions which he has just read out refer to the acquisition of sites and the building of factories as something quite distinct from the trading estate?

Mr. Brown: The point is that the Commissioner has never had the power under the original Act to assist undertakings carried on for profit. This Bill gives him that. Reading the principal Act with this one he has the power.

Mr. Dalton: I want to give a practical illustration. We are told that so far as South West Durham is concerned, it has been said by Sir George Gillett that there is no intention of making an estate there. Do I understand the right hon. Gentleman to say that there is power for the Commissioner to build a factory in some part of this area?

Mr. Brown: Most certainly, under the general powers of Section 1 of that Act, read in conjunction with the increased power under this Bill.

12.52 a.m.

Mr. Furness: The right hon. Gentleman has told the hon. Member for Seaham (Mr. Shinwell) that the Commissioner has power to build a factory in my constituency.
I wish to ask whether the Commissioner will have power to build such a factory in advance of requirements so that a factory is there ready when somebody comes along, or will he have to wait until a specific inquiry is made? We have in fact, to my knowledge, lost certain industries because there were no factories waiting. We feel that if factories could be built beforehand we might get industries.

Mr. Brown: That is entirely in the discretion of the Commissioner, who is empowered to carry out the economic development of the area. He has power under Section 1 of the original Act and increased power is given to him now.

Mr. Daggar: May I ask whether the Commissioner will have power under this Bill to build a factory? I came on a deputation to the Commissioner, previous to the introduction of this Bill, and sought him to build a factory for a person anxious.


to develop an industry in my division. Previous to the introduction of this Bill, this person was informed by the Commissioner he could only expect to occupy a factory on a trading estate.

Mr. Brown: If he reads, in connection with the principal Act, Clause 2 of this Bill, he will find
The Commissioners may, notwithstanding that the undertaking will be carried on for the purpose of gain, let a factory in such an area.
There has been doubt about that up to now.

Mr. Daggar: In the Bill it says he has power to let a factory. It will be observed that the power is to let a factory and it does not provide for the building of a factory before letting it. In specified areas you may let a factory, but does that imply building a factory as well?

Mr. Brown: In Clause 7, the interpretation Clause, it says that a factory means also a site for such premises. It says a factory includes not only that factory but also the site.

Mr. A. Jenkins: The right hon. Gentleman says that the Bill gives power to build a factory. The only thing provided under that Bill is that the Commissioner may let a factory. I have been through

the principal Act and I cannot find power which will enable the Commisisoner to build a factory. If that exists will he give me the particular place where that occurs?

Mr. Brown: Clause 1 of the original Act says that there shall be two Commissioners for the
initiation, organisation, prosecution and assistance of measures designed to facilitate the economic development and social improvement of the areas.
The doubt has been as to what he was entitled to do by way of providing factories, since in part of the Act he was forbidden to assist undertakings carried on for gain. Reading the original Act with this Bill he has the power.

Mr. Shinwell: There was some doubt as to the power under the Act and it was necessary to provide additional powers. The right hon. Gentleman states that these are provided in the Clause under review. Would it not have been better if specific words had been introduced to give the Commissioner power not only to acquire sites but to provide factories?

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 150; Noes, 53.

CLAUSE 3.—(Financial assistance for new undertakings in Special Areas.)

1.5 a.m.

Miss Ward: I beg to move, in page 2, line 15, at the end, to insert:
and the said Commissioners shall, in accordance with the recommendations of the advisory committee to be appointed as hereinafter set forth, notify to such persons on application the most suitable forms of industrial activity from the point of view of national self-sufficiency.
Would it be in order for me to discuss on this Amendment the whole principle of my new Clause, because if I can persuade the Minister to accept this Amendment I can then just simply move my new Clause. This Amendment is dependent on the acceptance of the new Clause. If you would allow me to widen the scope of the discussion I think it would save time.

The Chairman: Yes. I do not think it is really possible for the hon. Lady, or at least she would find it difficult to discuss this particular Amendment without reference to the new Clause. If this Amendment is accepted the new Clause will probably follow as a matter of course.

Mr. Shinwell: Is it your intention to call the Amendments standing in the names of the hon. Members for Colchester (Mr. O. Lewis) and Huddersfield (Mr. Mabane).

The Chairman: I was informed that they did not desire to move them.

Miss Ward: I apologise to the Committee for having to move this Amendment at this time of night, but I see no reason why we should be expected to listen to all the Amendments moved by hon. Members belonging to the Opposition and not be in a position to state our own cases. I believe the proposal which I have to enunciate in this Amendment contains one or two points of interest which might relate to the prosperity of the Special Areas in future. I would first, however, refer to the speech which was made by the Under-Secretary of State for Scotland (Mr. Wedderburn) in which he said
Take, for example, an industry which wished to establish itself at Gateshead. If that industry would otherwise have gone to Greater London, and if it is obviously going to Gateshead at some inconvenience, and if it is also the kind of undertaking which would


be suitable to that district, there, I suggest, would be an obvious case in which the Commissioner would be justified in stretching these concessions to their greatest extent. But supposing it were an industry which if it had not gone to Gateshead, would have established itself, let us say, in Middlesbrough, which is not within the boundaries of the Special Areas, and supposing it was going to Gateshead in order to get these advantages with a view to competing with similar industries in Middlesbrough, there, I suggest, would be a case in which these concessions could not be given.
It seems to me that until to-night that statement in the Under-Secretary's speech has caused very little comment by hon. Members on this side of the House. It does seem from that statement that we may find ourselves in years to come in some very great difficulty in deciding which industries should receive concessions under the Bill and which industries are going to be debarred from receiving concessions. It seems to me that we should find ourselves in a very much stronger position if we could go out, so to speak, to try to establish in the Special Areas industries which, up to the moment, are not operating in this country at all. For this purpose I have put down my Amendment. I have tried on one or two occasions to encourage the President of the Board of Trade to allow me to obtain information from the Board of Trade as to what are the things which are being imported into this country at the present time for which no provision for manufacture is made here, and could be economically manufactured in this country. The President of the Board of Trade has always taken up the attitude that the establishment of new industries is primarily a matter for the manufacturers.
There we come across a very great weakness, because if a manufacturer has decided on a special industry which widens the range of articles he is producing, he has then made up his mind where he wants to establish the industry. It is going to be very much easier to persuade people to go to the Special Areas if you can persuade them that by establishing new industries in the Special Areas, very few difficulties will be raised of obtaining concessions under this Bill. The whole purpose of this Amendment is directed towards establishing the machinery to try to ascertain which industries might reasonably, and will be, established in the Special Areas.
I think that there is a very great opening for the setting up of an advisory committee to consider what kinds of industries could very well be established. It seems to me that we are offering all kinds of concessions, all of which I most heartily support, and the great difficulty up to the present has been not the offering of valuable sites, not the offering of concessions, but the lack of industries, and so I want to set alongside the concessions which can be obtained in this Bill a chance of establishing some machinery which shall have as its primary object the suggestion of the sort of industries which may be established in the Special Areas, and the suggesting of them before they have settled down in any other part of the country. If I might refer to the establishment of a new industry on Tyneside recently, I would point out that Messrs. Swan, Hunter and Wigham Richardson are just in the process of establishing a new plywood factory. I understand that until the present time plywood has been imported, at any rate for use on Tyneside, from Germany. There does not seem any reason why plywood should not have been manufactured in this country for a long time past, but it has only just been established on Tyneside. It has occurred to me that there must be a considerable number of industries which might quite reasonably be established in this country, which would not be in competition with any other industry in the whole of the country.
I have been at considerable trouble to try to get the necessary information to support my contention, but dealing with Government departments, dealing with the Board of Trade, dealing with the Overseas Trade Department and dealing with the Federation of British Industries is not a very easy matter. Consequently I have had to devise the idea of putting the onus on an advisory committee within the province of this Bill, and I hope my right hon. Friend will consider my suggestion favourably. It has been indicated to me, for instance, that you cannot buy unbreakable domestic table glass. It seems to me that it might be worth while considering the possibilities of that in this country. Again, I am told that the production of products from food in relation to canning from starch and glucose, and a variety and range of subjects are worth consideration.
It has been extraordinarily difficult to find any way of ascertaining where the industrial gaps are and how it would be possible to fill those gaps. I know that my right hon. Friend is going to say that the Ministry of Labour has industrial officers who could address themselves to that particular proposition. On the whole I am not satisfied that industrial officers without power are going to have a very easy row to hoe. We have had appeals addressed by the Prime Minister and the Minister of Labour and appeals of all kinds have been addressed to industrialists with very little result and I think we want something stronger than just an industrial officer attached to the Ministry of Labour with, so far as I understand, no power of co-ordination. I have raised the question of co-ordination between Government Departments before, and I am now going to address one specific part to my right hon. Friend. I think he knows, without my emphasising it, how very much I admire and appreciate the work he does, but I would say there is a very great lack of coordination between Government Departments. I know that the right hon. Gentleman does not allow himself to be pinned down. There is a very great deal of cleverness in a Minister who knows when to be pinned and when not to be pinned. I want to know tonight before my right hon. Friend answers the case I am putting to him, whether he has consulted the President of the Board of Trade, the Secretary to the Department of Overseas Trade and the Minister for the Co-ordination of Defence, because, after all, there are essential things which must be manufactured in this country in the interests of the Defence Services.
In the range of products I think there is reasonable ground for a thorough investigation so that these things could be established in the Special Areas before we start any more fights between the Highlands versus South Wales. I can imagine that the Minister will put up a good argument against accepting this Amendment, but I should like to know whether he has consulted all these outside Departments and then I would know whether there is real co-operation or not. I should like the machinery to be established whereby you would have the textile industry, the iron and steel industry, the food production people, the engineering people, the glass manufacturers, the electric furnace

produce manufacturers and the whole range of industries, the manufacturing chemists, the paper trade, the timber trade and the shipbuilding industry, and I should like an expert for each single industry to concentrate on finding out where the industrial gaps in these industries are, and when they have found where, if any—and I am speaking without technical knowledge and have made myself quite sufficiently objectionable to Government Departments already—I should like to see a representative of all this variety of industries concentrating on the one part of filling those industrial gaps by establishing those industries inside the Special Areas.
It seems to me that that opens up a very wide field. If you were to find the necessary goods which were to be manufactured and then go to the federated industries and say "Here is a list of these things which could reasonably be manufactured in this country; would you make arrangements to see they are manufactured, and we suggest first of all that you should start at sites in the Special Areas," then I think that those industrialists would find it very difficult to withstand my right hon. Friend. As I understand the value of this Bill, we are not going to attract to the Special Areas the big propositions. The concessions which are offered in the Bill are of no interest to people like Imperial Chemicals Industries or Vickers Armstrong, or Boots or anybody like that. They are going to attract only the small industries, and I suggest that in order to try and do so we should establish some machinery which will suggest to responsible people how these industries could best be established in the Special Areas.

1.21 a.m.

Mr. E. Brown: I think the hon. Lady will realise that she has really given the answer to her own speech. She has discussed this with me and with other Ministers several times, as she says. The point is one which came to her own notice and she has told us how it arose. It arose from a firm in her own constitutency having to use certain materials not manufactured in this country. Such a committee which would need to have expert knowledge and the time to carry out the work could then ask the industries in this country to undertake that manufacture. What the hon. Lady is asking for is some arrangement which will cover an enor-


mously wide sweep of ground. She wants an advisory committee which will be able to survey the whole field of industry, find out all the things we do not make here and then decide which they can recommend. The Amendment does not go so far as that, but the only people affected would be those concerned with the application for financial assistance to the Special Commissioners. The people who make applications for grants will already have made up their minds as to the kind of undertakings they want to establish before they ask for grants.
The hon. Lady has also asked if there is close cooperation between the various Departments. I can assure her that on all these vital matters there is the most close association between all the Departments—the Board of Trade, the Overseas Trade Department, the Ministry for the Coordination of Defence, the Services and the Ministry of Labour. There is constant liaison, and a whole network of sub-committees to deal with these particular problems. If there is any process concerned with defence which we come to the conclusion is needed, we can undertake it without any such arrangement as she suggests. What she asks for is a committee to examine and consider, analyse and report. I ask her to consider the burden of work which that would put on the committee. It would have to go round the whole circumference of all the materials which are not manufactured in this country. The hon. Lady has discussed this at great length with the Board of Trade, which is much more interested than the Ministry of Labour. I ask her to consider the facts. She can be assured that if such a thing were considered desirable, the Board of Trade and the other Departments would do it over the whole range of industries or in regard to any particular industry on which they might recommend action.

Miss Ward: The Board of Trade have not been in the least sympathetic. They said it was not part of their business and that they were not interested. It was only when I said that I would bring the subject forward day by day until they were sick of me, and they did not know what to do, that I got an interview with the

Parliamentary Secretary, who was extremely sympathic and very kind.

Mr. E. Brown: I am going to give the reasons why they considered it impracticable. The trade statistics of the United Kingdom contain an elaborate analysis of imports of manufactured goods, but they are not in sufficient detail always to distinguish between the processes for goods falling under the same general description, and for that very reason the Department is not able to provide any list of goods not extensively produced in this country. Still less is the Department equipped, and still less would the suggested small advisory committee be equipped, to indicate which particular lines of production United Kingdom manufacturers would be able to embark upon with reasonable prospects of success. The committee would have to depend upon authoritative information, and this could only be givers by technical experts and business men, possessing the most intimate knowledge of each particular item. Industrialists are, no doubt, better equipped than any Government Department to attempt such a task. I understand the hon. Lady has in mind a small advisory committee of about five members, but it is clear that to analyse, examine and report on even one process about which we had no previous knowledge inside this country would be a formidable undertaking unless one got a specially selected body of experts on that subject.
It is for these reasons, and for others with which I do not wish to detain the Committee, that I think this proposal is impracticable. I believe the Board of Trade have informed the hon. Lady of three things: first, that to attempt to do this throughout the circumference of industry, as is her laudable desire, would be impracticable; secondly, that to ask any small advisory committee to undertake the task of selecting such processes as would have a reasonable prospect of success would be to ask something which such a committee could not do; and, thirdly that this is a question of defence. I assure the hon. Lady that there is complete co-ordination between the Departments and any arrangements which any of the Departments require to have made by the Board of Trade they could under-


take under their own powers. I must ask the Committee to reject the Amendment.

1.31 a.m.

Sir S. Cripps: I understand this is a further stage of the hon. Lady's technique in the role of what might be called "the importunate widow." There was one phrase of hers with which I was in complete sympathy, and that was when she spoke of being unable to pin down the right hon. Gentleman. It brought to my recollection the efforts made in earlier years to pin down struggling butterflies on a board, and I wondered what sort of butterfly she envisaged the right hon. Gentleman as being. I certainly think it was not a Red Admiral, probably it was the Common Blue. This Amendment seems to have the germ of an excellent idea in it, but not to be appropriate in the place in which it is sought to introduce it into the Bill. This Clause, as I understand it, contemplates people going to the Commissioner for assistance who have already made up their minds as to what they are going to do, and getting assistance in doing it. But that does not mean that there are not two very vital and important points raised in this Amendment which merit the fullest discussion by this Committee. The first one is contained in the words "from the point of view of national self-sufficiency." It is vital to consider whether we are going to have an economic policy in this country, which will depend for its success upon national self-sufficiency, and on that I should like to make a few remarks, especially in view of the present international situation.
National self-sufficiency is what has now come to be called autarchy in a number of other countries and has been pretty universally condemned by most people in this country. Probably Members on both sides of the Committee point, for example, to Germany, or Russia, or other countries as examples of national self-sufficiency. I simply mention Germany because it is so often spoken of at the present moment and because the people there have made such a very big attempt to get this system of autarchy established. Most people regard it as a bad system in other countries because of the reflection of any such attempt on their own trade. Were the world now to practise national self-sufficiency we should find ourselves, instead of having an expanding trade internationally, with

a diminishing trade internationally, which would tend more and more to create those very difficulties which are, perhaps, so largely responsible to-day for the unstable and uncertain condition of world economics.
Therefore, I hope that the right hon. Gentleman, at some stage of the Debate upon this Amendment, will be able to tell us whether this idea of national self-sufficiency is one towards which the present Government are working. We have had various import duty regulations, and a tariff taxation which has been gradually built up over a series of years, all, of course, tending to give the impression, at least, that some form of self-sufficiency was being aimed at. The Committee must bear in mind that in this country least of all, perhaps, are we able to aim at national self-sufficiency, because I am sure the hon. Lady has overlooked the agricultural situation. I cannot understand how in a country with our present population and our present area of land and system of cultivation it is possible to contemplate national self-sufficiency. I myself have given up the habit of eating meat and it would not matter to me if no more meat were imported into the country, but if we were to start to make ourselves nationally self-sufficient in beef and mutton and lamb a great deal would be said in Australia, New Zealand and the Argentine as regards our export trade. And as the areas with which the hon. Lady is particularly concerned are areas which are suffering by reason of the lack of export trade, it seems to me that her policy is suicidal for those very areas.
Suppose that instead of making this suggestion that there should be a survey of the country in order to accomplish autarchy or national self-sufficiency she had made the suggestion that there should be a survey of the country in order to ascertain the facts as regards industries and employment in this country far more accurately than can be done at present; then, certainly, I should have been inclined to give very strong support to her suggestion. This raises the second important point. The new Clause which we are discussing in association with the Amendment suggests that the Board of Trade should appoint an advisory committee consisting of not more than five and not less than three to examine, analyse and report on the nature of those


industries which, owing to the absence of development in this country, could be most suitably established in the Special Areas. The hon. Lady has stated that she has been unable to obtain information from the Board of Trade or other Government Departments as to what these industries are. Indeed, the right hon. Gentleman has confessed that that information is not available even to the Board of Trade, who have far fuller statistics than anybody who reads the statistics issued by Government Departments.
This country is one of the truly industrial countries in the world but it is, I believe, far behind in the issue of statistical reports. I do not know whether the right hon. Gentleman can tell us whether this country was even represented at the conference on this subject held in Canada, I believe last year. In Canada they have developed a remarkable statistical service, I think the best anywhere in the British Empire. One of the first things that President Roosevelt did when he embarked upon His abortive attempts to revive industry in America was to start to make a statistical service, so that he might be able to enter upon some form of planning industry. In all countries it has been found absolutely impossible to proceed with any form of orderly planning, whether capitalist or any other kind, until there is available basic information which can only be obtained by a co-ordinated statistical office of the central Government. I had the opportunity, when I was last in Canada, of discussing the whole problem of Government statistics with the extremely able head of the Canadian Statistical Department. He said he was appalled at the lack of material available in this country, considering the vast importance of our industry and the very sort of difficulty with which we are now confronted—the difficulty with which the hon. lady has been faced in attempting to put up a constructive suggestion for the appeasement of an evil all of us want to solve, a difficulty very largely arising from the fact that none of us, including the Minister, knows the facts as regards the industry of this country.
If this had been a proposal to start a new statistical department in this country, in order to ascertain the basic facts, so that both the Government and other

people might have an opportunity of making valuable suggestions based upon these facts, then certainly I should have been very much in favour of this Amendment. I do not desire to labour this point, because of the late hour. We ought to be very grateful to the hon. lady for raising two matters of prime importance the matter of national self-sufficiency, upon which I hope the Minister will give the views of the Government, and this matter of statistical information, which is of vital importance to everyone in this country who is really going to tackle from the bottom the whole problem of the organisation and planning of our industry.

1.43 a.m.

Mr. Ede: It was a great pity that the hon. Lady should have made an unwarranted attack upon the Opposition by alleging that the Committee are sitting listening to Amendment after Amendment moved by the Opposition. Unfortunately, we have not yet succeeded in finding an Amendment which has passed the Chair. We have spent the whole of the evening discussing amendments moved by members who are nominally supporters of the Government. Unfortunately, progress has been delayed by the gross and glaring incompetence of the Minister, as evidenced by the fact that the hon. Member for Rushcliffe (Mr. Assheton) had to get up and tell us that the point had been completely obscured by the Minister's explanation, though the point was exceedingly simple and he could elucidate it. Was that a hint, in view of forthcoming Government changes, that he can do things in a way which would better entitle him to sit on the Treasury bench than the Minister? That did not lead to a recrudescence of speeches from the Opposition, but the hon. Members for King's Norton (Mr. Cartland) and Sunderland (Mr. Furness) had to get up to ask further questions. It is not the Opposition who have been keeping this Committee sitting. My last train went at 12.16 a.m. and my next does not go until 5.46. I was hoping, until Government members started their Amendments, that I should catch the 12.16 train. I regret that the hon. Lady who represents a constituency opposite to mine on Tyneside should have made a speech detrimental to the southern bank of the Tyne. My constituency imports timber.

Sir Irving Albery: The hon. Member is always most interesting, but has this anything to do with the Amendment?

The Chairman: I was patiently waiting to see.

Mr. Ede: My preliminary remarks may have been somewhat extended though I was only following the example of the hon. Lady, but I do not want the hon. Member for Gravesend (Sir I. Albery) to think we shall reach the place which is the name of his constituenecy before I reach the end of my speech. The hon Lady mentioned the manufacture of plywood as a specific example of what had actually been done on the lines she instanced. She said that a firm of great repute on Tyneside had been able to introduce the manufacture of that product into this country, and suggested that the example might be followed. I really wanted to point out that the importation of plywood is a matter of considerable importance to my constituency, because not merely is there work in importing this plywood but in producing the necessary goods which are to pay for it. No foreign supplier of plywood will send it to firms in my constituency unless assured that something goes back to pay for it.
I want to deal with this question of self-sufficiency. The policy of the Government has reduced the arrangements of the port I represent to a state of great chaos. Self-sufficiency has meant the imposition of a very large number of duties, including those referred to by the hon. and learned Member for East Bristol (Sir S. Cripps) on beef and veal. A substantial amount is imported into my constituency, so much, indeed, that recently the bonded warehouses were overflowing with cases of bully beef. A firm of importers were asked by the Customs authorities to remove the bully beef so that fresh supplies could be admitted. They were charged 10 per cent. They sold this beef and passed on the to per cent. They were then informed that they should have been charged 20 per cent., and they regretted that they were unable to pass that on to the consumer. I have applied to the Financial Secretary to the Treasury and he has declined to do anything to assist me in this matter. What is the use of talking about national self-sufficiency when one of the great ports has already been brought to a state of chaos? We, as the Opposition, have no desire to keep

any of the supporters of the Government here. If they will leave the whole of this business to us we will undertake to provide them with a Bill which will really be a credit to them and a monument of what a Socialist party could do if it were not merely in office but in power. Therefore, I hope the hon. Lady will realise that it is not the wiles of the Opposition in designing Amendments to the Bill which have, unfortunately, kept her here until this hour of the morning. We cannot support her Amendment, but we thank her for the opportunity of raising many matters which did not seem at first sight very vital to this part of the Bill.

1.51 a.m.

Mr. Bevan: I was surprised to hear the Minister reject the Amendment because it was too ambitious. I was surprised, because I had an opportunity of discussing an idea analagous to this with Sir Malcolm Stewart before he resigned. I remember making a suggestion to him in his office at Broadway Buildings that one of the contributions he could make towards the solving of the problem of the distressed areas was the establishment of a bureau of information in London and that this bureau could be established under the aegis of the President of the Board of Trade. I was happy to see in his report afterwards that he included that as one of his recommendations, but I have not seen any evidence of the Government proposing to act upon that recommendation. I believe that that recommendation is on all fours with the Amendment that has been moved by the hon. Lady and is in accordance with the substance of the new Clause which she will probably move later on some other day when we reach that part of the Bill.
It seems to me that that proposal is one which ought to commend itself to the Minister of Labour. It is very valuable as the hon. and learned Member for East Bristol (Sir S. Cripps) has pointed out, that this country should have more precise information as to the distribution of industry in Great Britain and in relation to the industry of this country with other countries. It is very obvious that it is not possible for the hon. Lady to have her project properly carried out to find out what industries exist in other countries that can properly be established in Great Britain, until we first find out what


industries exist in Great Britain. That is precisely the information that the Board of Trade has not got. We have had no great industrial survey in this country and we are behind most industrial nations in the world in this respect. This is a matter of the greatest possible importance, because many of us have from time to time attempted to direct the attention of the country to the redistribution of the industrial population which has been taking place since the War.
That problem has been discovered by hon. Members opposite some little time ago as though it was a novel discovery. I remember having a conversation with the right hon. J. H. Thomas who, at that time, was appointed Lord Privy Seal in the Labour Government. Being a young Member of Parliament and being innocent and credulous, I thought he had serious intentions towards his job. I approached him about that time—in 1929—and suggested to him that one of the problems that was going to face this country was the drift of industry from North and West to South and South-East, and that what he should do was to ask Parliament for powers to make it necessary for an industry involving capital expenditure of more than about £1,000 to obtain a licence either from the President of the Board of Trade, or from the Office of Works or any Government Department established for that purpose, so that the Government might be able to bring all potential manufacturers to one common place where they could be advised as to where they could establish industry to the best advantage of the nation. It was too much at that time to recommend that he should have power to order industry, as we were a minority Government and we could only suggest inducements. It might have been possible then to have that central information bureau and to have been able to advise manufacturers what land was available, what railway facilities could be provided, and for the Ministry of Transport to be able to build roads in order to establish an industry where it was socially desirable to do so, and no doubt a good many industrial developments in Great Britain in the last seven or eight years which at least could have given employment in substitution for employment in the Special Areas could

have been provided for. Unfortunately, that recommendation did not commend itself to the right hon. Gentleman, who was engaged at that time in getting a crick in his neck from looking for trade recovery round the corner.
If you want to find out what industries exist in other countries that can be established in this country it is necessary first of all to make a survey of the industries that are here. I understand the Minister suggested that this is too ambitious a task to ask the President of the Board of Trade or some Government committee to secure information on. I am astonished to find that that is so. I should have thought it is one of the prerequisites for dealing with this problem that information of that kind should be collected and be available in some Government department. Of course, one cannot suggest it now and one would be out of order in doing so, but after information of the kind had been collected and if the House had been in possession of that information it would then be necessary to force would-be manufacturers to apply for a licence in order that that information might be made available to them. Having made that survey, which I am sure that hon. Lady would agree would be an accomplishment, we should then be able to know what our resources were and having found out that industries in other industrial nations were should then find out what industries we could have established here. There might be some Members who think this might be absolutely unnecessary information for the Government to have, for they believe that this could be left to private industry, and if there were industries in other parts of the world that could profitably be established in Britain, the information would come to some one of them who would establish the industry. I am quite sure there is not art hon. Member in any part of the House who would seriously advance that contention. I have had experience in the last few years, like all my hon. Friends who have been trying to establish new industries in the Special Areas, which work quite well in other countries, and which could be established in this country without doing any violence at all to the division of labour and without interfering with existing industries.
We have had the instance of calcium carbide. It is only produced in small


quantities, I think even negligible quantities, in this country. We know this and I have it on the highest authority that calcium carbide is being brought into this country at anything from £5 a ton more than it could be produced at in this country. Here is a perfectly profitable industry which could quite easily have been established in this country many years ago but which is not being established simply because of the insularity of some of the people in this country. It might have been possible if that knowledge had been in the possession of a Government Committee and sufficiently advertised, and brought to the notice of those enterprising gentlemen in the City who are always looking around for nest-eggs of this sort, and it might have been posible to stimulate the establishment of an industry of that kind in this country some time ago. If such information had been made available by a Government committee that committee could then suggest to the would-be enterpriser that if he would establish an industry of that kind in Great Britain it might be established in a distressed area. I am sure that hon. Members can think of other industries which could be established in Great Britain.
The Amendment of the hon. Lady the Member for Wallsend (Miss Ward) has suffered a disadvantage in being brought in at a time of day when hon. Members are not ready to give it serious consideration. When Amendments are brought forward at this time of the morning hon. Members are apt to regard them as a means of prolonging the Debate. If this Amendment had been brought forward at seven-thirty in the evening instead of at this hour it would have stimulated interest in all parts and we should have had an interesting discussion. I hope the right hon. Gentleman has not said the last word on this matter. It is a good idea in embryo. We all know that if a committee of this sort is set up, whose function it is to obtain information about domestic or other affairs it often sticks on, and if so, we must conceivably know a little more about the topography of industry in this industry. It is one of the most ironic commentaries on this Government and on private enterprise that here we are discussing this morning, after many years of discussing it, a problem arising out of mal-distribution of Indus

trial enterprise, and at this moment we have an hon. Member of this House making a suggestion at this late hour that we must inform ourselves now what industries we have and may be able to establish.

2.6 a.m.

Mr. J. J. Davidson: It is with much of the same regret that I make an attempt to deal with this particular Clause and I want to assure hon. Members and right hon. Members that if it were possible, I would willingly defer my own remarks until later, but for the very grave national issue that has been raised in the hon. lady's Amendment. I would ask the Minister of Labour to keep in mind in discussing this matter of an advisory committee the very many pieces of advice which he has received from local authorities all over the country. The hon. lady must remember when suggesting that it would be beneficial for the Government or the Minister of Labour himself to receive advice on the very many industries in the country, that local authorities all over the country, on this very same question, have been continually advising the Minister of Labour and the Department of the Secretary of State for Scotland on the needs and requirements of local areas all over the country. If I may for a moment refer to the position of Glasgow, the Minister of Labour himself knows that in Glasgow the civic authorities have continually brought to his notice the terrible poverty and distress, and reason after reason as to why Glasgow should be scheduled as a special area. We have in Glasgow many different industries—

The Deputy-Chairman: I hardly think that Glasgow would be affected whether this Amendment were passed or not.

Mr. Davidson: The point I was trying to make was that the hon. Lady suggested that an advisory committee should be appointed and I was trying to lay before the House the advice which the Minister of Labour had received on the condition of industries in this country.

Mr. Stephen: Further to that point of order, I should like to point out that Glasgow would be very much affected, because the Lanarkshire and Renfrew-shire Special Areas send a lot of people into Glasgow.

The Deputy-Chairman: Whether that advisory is established or not, it would still be limited to the Special Areas.

Mr. Stephen: With all respect this Amendment will have an effect on the Special Areas. If it has an effect on the Special Areas it will have an effect on the Special Areas around Glasgow and those Special Areas, because they are not being properly dealt with, are responsible for a lot of people coming into Glasgow, constituting a difficult problem for the Glasgow Corporation. Consequently, I say there is the indirect influence on Glasgow arising from the way in which the Government has handled the Special Areas around Glasgow. I think my hon. Friend was seeking to complain, as a Member representing a Glasgow constituency, as to how this was affecting Glasgow as the result of the bad treatment of the Special Areas.

Sir S. Cripps: Further to that point of Order. I would respectfully point out that in the suggested Clause, the proposed examination, analysis and report is into the nature of these industries in respect of which there is an absence of development in this country. That means the entire country and not merely the Special Areas. I respectfully suggest here it is advisable to set up a body which will analyse all the industries of the country first, and thereafter make recommendations as to whether certain businesses, in such places as Glasgow, for instance, should be encouraged in the Special Areas.

The Deputy-Chairman: If the hon. Member will read the words of the Amendment where they are proposed to come in he will see they are governed by the beginning words of the Clause—
for the purpose of inducing persons to establish an industrial undertaking in any of the special areas.

Sir S. Cripps: I was dealing with a matter which your predecessor in the Chair told us we were to follow, which is the new Clause on page 1044. We were, by the consent of the Committee and the instructions of the Chair, discussing that new Clause together with the Amendment which you have just mentioned. The reference I was making was to the new Clause and not the Amendment.

The Deputy-Chairman: Of course, it is obvious that if the Amendment is not carried the new Clause cannot be moved.

Mr. Davidson: I was discussing the advice which Glasgow had submitted to the Minister and to other Members of the Government. The Clause, if amended in the way proposed, would read:
and the said Commissioners shall, in accordance with the recommendations of the Advisory Committee to be appointed as hereinafter set forth.
Then it states:
if the Minister of Labour, upon representations made to him is satisfied as respects any area, not being or forming part of the Special Area.
That brings in the area of Glasgow which is not as yet scheduled as a Special Area. I am arguing that this section shall apply to the appointment of an advisory committee, as suggested by the hon. Lady. Therefore, with great respect to the ruling of the Chair, I submit that I was perfectly in order in discussing that, and in pointing out that any advisory committee set up with regard to industry could coordinate their efforts in submitting advice to the Minister, with the industrial advice that the hon. Lady desires placed before the Government. I was rather surprised when I heard the right hon. Gentleman give such an emphatic: assurance that there was now in operation a co-ordination of effort between the various Ministers of the Crown. I think hon. Members will, generally speaking, agree that up-to-date, at least, the House has seen very little effect of this co-ordinated effort of the various Departments. I have constantly received answers to questions on the subject of co-operation of effort between the Minister of Agriculture and the Minister for the Co-ordination of Defence as to when the Government were going to start making some co-ordinated effort with regard to Scottish agriculture. We all know perfectly well that up-to-date we have merely had pious phrases and promises from the Minister, and we have not seen anything of this co-ordinated effort to which the right hon. Gentleman referred.
I very much regret that the Clause suggested by the hon. Lady stops short of the question of national self-sufficiency, because I believe that this advisory committee could do a very great work if the hon. Lady had made a suggestion that


it should be extended not only to national self-sufficiency but to a guaranteed national equality of distribution. That would have been a point with which I am sure hon. Members on the other benches would have fully agreed and would have been willing to press to a Division, because we must recognise that a committee operating merely for the purpose of obtaining self-sufficiency in the country and not carrying on that task to the point of a nationally equal distribution of production would be failing in its duty and would be creating still more acute unemployment all over the country.
I regret very much that the Clause has stopped short of that. I do not know whether the hon. lady is afraid of equal distribution and the national self-sufficiency that we should have from this advisory committee, or not, but I suggest that if an advisory committee of this kind were set up, cooperating with the local authorities, we could then have a Minister of Labour who was fully informed of what was required all over the country. For instance, the advisory committee would surely never suggest that the textile industry should be set up in the City of Glasgow, when there are so many distressed areas in other parts of the country with the equipment and factories for the textile industry already there. But the advisory committee could and would advise that as far as Glasgow is concerned many other industries that have been in and around Glasgow could be reinstated and assisted still further, so that the question with which the Glasgow Corporation is faced today, namely, meeting an ever-increasing burden of unemployment and poor law relief, would be solved. By the setting up of this advisory committee, acting in conjunction with local authorities, the position of the Glasgow Corporation would be made very much easier, and the Glasgow authorities would not be facing the responsibilities which ought to have been long ago accepted by the Government itself of meeting another one million pounds extra poor law relief.

The Deputy-Chairman: That hardly arises on this Amendment.

Mr. Stephen: Yes, it does.

Mr. Davidson: With all respect, as I pointed out, so many people are coming in from the Special Areas and getting employment in Glasgow, with the result

that there are many people in Glasgow who are unable to get employment, and so have been thrown on to poor law relief.

The Deputy-Chairman: That hardly seems to be affected by the Amendment.

Mr. Davidson: I was trying to make the point that this advisory committee, if set up, could co-operate with the local authorities because of their great knowledge of industry and because of their knowledge in regard to setting up appropriate industries in the various local situations. By so co-operating they would protect local authorities or any other authorities from being landed in the mess that the Government has obviously caused by their ineptitude in the past in Glasgow and other places.

The Deputy-Chairman: The Committee was set up to advise on the establishment of certain industries in Special Areas. They could not advise either for or against the statutory position in Glasgow.

Mr. Davidson: The Bill states that the local advisory committee would be set up to deal with the question, not of particular Special Areas, but of areas that the Minister of Labour himself was of the opinion were suffering from severe unemployment.

The Deputy-Chairman: Order. That is exactly what it would not do. If the hon. Member will look at the hon. Lady's proposed new Clause, he will notice that it is limited to the Special Areas, and this Amendment as moved is also limited to the Special Areas. In no circumstances could be it connected with the labour Clause in the Bill.

Mr. Davidson: Might I suggest that it deals in the Clause with the recommendations of the advisory committee to be appointed "as hereinafter set forth", and I am dealing with exactly what "as hereinafter set forth" means.

The Deputy-Chairman: The hon. Gentleman is quite incorrect. "Hereinafter set forth" means the proposed new Clause of the hon. Lady, which is itself limited to the Special Areas. The hon. Member must abide by my Ruling.

Mr. Shinwell: On that point of Order. Is it not in order to argue that if an advisory committee of this kind is established affecting primarily the Special Areas, as it is intended to do, the effect may be advan-


tageous to areas not regarded as Special Areas, and is that not the argument of the hon. Member?

The Deputy-Chairman: No, I think it is not. If the hon. Member would confine himself to that, he would be in order.

Mr. Davidson: Very good, Captain Bourne, I am quite willing at all times to abide by the Ruling of the Chair. The setting up of this advisory committee tied down to conditions reminds me very much of an old Scottish story about a very old couple who had been married for very many years. The old lady passed away, and friends of the bereaved husband waited patiently for the funeral to take place. After three days there was no funeral, and at the end of a week there was no funeral, but at the end of a fortnight the old lady was buried with all due pomp and ceremony. One of the old Scotsman's friends went up to him and said, "Sandy, there is a great deal of talk about how long you kept the wife after she was dead." The Scotsman replied, "The reason is that when Maggie and I first got married 45 years ago we agreed that the first chance we had we would have a quiet fortnight together." It seems to me that the hon. Lady, in putting down this Clause and criticising the Opposition as she has been, has attempted to delay the real work of the Members on these benches here with the object which they have of bettering this Bill. The Glasgow authorities are anxious to be incorporated in this Bill. If I am permitted to give my own personal opinion, I do not see why they are anxious to be incorporated into this Bill, because I think this is a Bill that could only have been brought forward by the right hon. Gentleman the Minister of Labour himself, a niggling, petty attempt to try and deal with a problem that re-quires—

The Deputy-Chairman: Order. We are not on the Second Reading now.

Mr. Davidson: This Bill, in my opinion, is not worthy of any corporation desiring to co-operate. I think the Clause of which I have spoken is one which shows up entirely the petty-mindedness of the Government, and I therefore suggest to my hon. Friends that, so far as they are concerned, and so far as this particular Clause is concerned, they should leave the

hon. Lady to this guerilla warfare with the President of the Board of Trade and the other friends of the hon. Lady. So far as Members on this side are concerned, we shall satisfy ourselves with showing up the mean spirit in which the Clause and the Amendment are presented.

2.24 a.m.

Mr. Shinwell: I wish to furnish one or two reasons why hon. Members on these benches are not likely to support the hon. Lady in the division lobby. If the Amendment had been differently worded, at all events in the last line, I believe it might have been an appropriate Amendment for Members on this side and indeed for the whole Committee to support, but we naturally in the circumstances take exception to the words "national self-sufficiency." That is a subject which requires very careful consideration indeed, and all the relevant factors must be taken into account before words of that kind could be accepted. If the last line had read "industrial activity from the point of view of the nation as a whole," the Amendment would have been more acceptable to Members on this side. Nevertheless I want to express my own gratitude to the hon. Lady for having raised this matter. The subsequent Debate on her Amendment has, in my view, been extremely valuable. It is a great pity that it should have had to take place at such a time of the morning. It does seem to me that sooner or later the Ministry of Labour, the Board of Trade, and kindred Departments must take cognisance of the need for collating all necessary relevant information in relation to the location of industry and the needs of our industrial life.
The right hon. Gentleman the Minister of Labour was formerly Minister of Mines. I have had the honour of occupying that position in two Governments, as the Committee knows, and one thing that struck me more than anything else when I occupied that position was the higgledy-piggledy position in the mines, by which I mean the power vested in the coal-owners to put down a mine here, there, or anywhere as they thought fit, and their power—and a proper power in the circumstances—to suspend operations in that mine even to the extent of completely dismantling the plant. What applies to the mining industry applies, as Members are aware, to many other industries in this country. The whole system is wrong.


There is little or no organisation. It is a matter of individual selection, individual ramp, individual influence, and it cannot be argued that the industrial life of this country is thoroughly organised, at all events efficiently organised, in accordance with the needs of the nation, and in particular with regard to the needs that are bound to arise in the future. I would urge upon the Minister that he might take into account the need for advising the Government, as far as his own Department is concerned, to take such steps as he thinks may be necessary in order to collate all possible information as to the needs of our industrial life—the kinds of industry that can properly be established in the Special Areas. For example, if you take the county of Durham, there has been much talk in these Debates of the need for introducing new industries there, and in South Wales and elsewhere. The question is whether we are going to get the right type of industry that will be permanent in character. We do not want mushroom industries or industries that come and go in a few years. It appears to me that, in relation to these important matters which affect the whole of our industrial life, and are not partisan questions, the Government might give them much more consideration than they have yet done. For that reason I support the intention of the hon. Lady, although I cannot support her Amendment.

2.32 a.m.

Mr. Burke: I want to deal with the matter from the point of view of national self-sufficiency. An hon. Member has stated that they had no information at the Board of Trade which enabled us to know what industries there are in this country that might be necessary from the point of view of self-sufficiency. I do not know whether the Board of Trade has that information or not, but I do know that the Board of Trade has some information about one industry which would be very severely hit if this idea of national self-sufficiency was carried any further than it has already been. If the proposal in this Amendment to take a survey of the industries of this country, with the object of starting industries in the Special Areas, is to be carried out, I would like the Minister to take cognisance of the fact that such a thing might have a bad influence upon one industry, that is to say, the cotton industry. I do

not know whether on a later Clause the Minister will be able to tell us where parts of Lancashire will come in if action is taken to establish new industries for the purpose of self-sufficiency in the Special Areas. That would indeed have a very bad effect upon the major industry of Lancashire. The hon. and learned Member for East Bristol (Sir S. Cripps) said we wanted a statistical department in this country. I do not know whether there is need for a statistical department, or whether that might be set up in one of the Special Areas, but we have sufficient statistics already in Lancashire about the cotton industry. We know that industry declined from 8,000,000,000 yards to 2,000,000,000 yards in its exports. What we need in that industry—

The Deputy-Chairman: The hon. Gentleman is quite entitled to point out that the introduction Of new industries in the Special Areas might cause harm to the cotton industry, but he must not go into the subject of the cotton industry.

Mr. Burke: I was pointing out that if new industries were set up which would take away our markets, it might have the effect of reducing the cotton industry still further. As I understand the suggestion of the hon. Lady, she does propose to start new industries, and she instances the industry of plywood which has been started in this country, which will enable us to live without our markets abroad. If that suggestion is taken up by the Government, I want seriously to point out that it is going to have a very bad effect in the case of cotton and other of our great industries. The need of the cotton industry is to retain its markets abroad and not to lose them. We have just had a very influential deputation to the Board of Trade with the object of impressing upon that department the need to retain and not to lose the markets which we have already got.

Major Procter: Is the hon. Gentleman aware that since the new industries have come into Lancashire the cotton industry has increased and not decreased?

Mr. Burke: I am not aware of that. I am aware that there has been a slump in the cotton industry of late, but I do not connect the two things at all. It does not alter the argument that the main outlet for the cotton industry is to be found in markets abroad. You cannot have


markets abroad if you are going to proceed on the lines of self-sufficiency. I think that is abundantly clear. I notice on the Order Paper the words of a Motion, which has been backed by 18o hon. Members, who ask the Government to make us self-sufficient from the point of view of poultry and eggs. I understand that the intention is that we should be free from the foreign yoke. That may be all right so far as the agricultural industry is concerned, but all the eggs imported into this country are imported in exchange for cotton goods and other goods. I want to stress the needs of the great exporting industries, which are not to be found in line with a policy of self-sufficiency that is apparently being pressed further upon the Government in these Amendments.

2.39 a.m.

Mr. Kelly: May I ask where are the people who are going round and asking "What kind of industry shall we engage in?" As far as I know the trades mentioned have not only been looked at but have been engaged in by many people in the country who are now extending their establishments. I think the Government should see what is required for people who should be engaged in work; and in that connection there is the question of the development of mines. I do not mean coal mines but other raw materials that can be got in this country. In some areas we have great distress and this is a work that the Government may very well engage in at this time. It is not a work to appeal to the Federation of British Industries, which is concerned with profits before it will engage in any undertaking or sink a shaft or mine. It is the duty of the Government to help these Special Areas to engage upon that work so that people might have an income, and I think that is the sole aim of our discussion to-night. I hope there will be one thing that will come as a result of these discussions and that is that the President of the Board of Trade, the Ministry of Labour and other Departments will engage upon these investigations to assist people in those areas and also the development of industry.
The point has been raised as to whether in encouraging work in the Special Areas it would have an effect upon districts

which are not named in the Schedule. Surely, if you engage on work in the Special Areas, in those parts of Scotland mentioned in the Second Schedule or in those parts of England mentioned in the First Schedule, you are bound, by your method of production in this country, to have an effect on other areas of the country which are not included in the Schedule. If we can develop these mines there are various metals such as tin which we could get, and if people were engaged upon getting them it would have a very great effect not only upon the distressed areas but also on other areas not included as distressed areas.
Textiles have been referred to in the course of this discussion, but I am not going to discuss Lancashire as it happens not to be included in the Special Areas, for a reason I do not understand in view of the suffering which has been submitted to by the people with too much patience in the last ten years. I want to refer to the textile industry which is carried on in some of the areas mentioned in the Schedule. Surely, it is not impossible to find means of extending the energies of those engaged in the industry to the advantage of the country and to the advantage of those who make use of the products of those mills. I do not see that the hon. lady has shown us anything that is going to be helped by this particular Amendment. I am wondering who are the people who are going round applying for an industry and who are asking where they can build factories. I hope this Amendment is going to be defeated and that the Government are going to give much more serious attention to this question.

2.47 a.m.

Mr. David Adams: I think the Committee ought to be grateful to the hon. Lady for putting down this Amendment if it were only on the ground that she has provoked this very very useful discussion, upon what is after all a matter of national policy. If her Amendment had finished at that word "activity" the Minister might have found it in his heart to have accepted it. We have a national self sufficiency as indicated in the pure conservative outlook which so animates the Government in the matter of tariffs, and if the hon. lady believes that the Government are likely to accept a general amendment or proposition of this character, which is nothing less than a demand for


national planning of industry, they would be accepting something which in the nature of things would not be acceptable. I am amazed that the hon. Lady, coming from an industrial centre like Wallsend, and being herself a Northumbrian, should have for one moment entertained the opinion that national self sufficiency would be of advantage to any industrial area. In 1932 when the tariff proposals were first introduced it was the chairman of the Tyne Commission who issued a strong warning to the Government and all concerned that an attempt to enforce what he called a narrow national self-sufficiency upon the State would destroy the shipbuilding, engineering and other trades directly connected with the export trade of the country. Even this year the Chamber of Shipping of the United Kingdom, showing an anxiety in regard to this policy, suggested that shipowners should use their influence with a view to inducing th Government to abandon this policy which is restricting the freer international trade of the world.
No one, I think, knows better than the Foreign Secretary that one of the causes of international unrest and against this nation is the policy of restricting our markets and endeavouring to exclude, as far as possible, the goods of other nations. It was a leading shipowner that said that the policy of the Government in the matter of tariff self-sufficiency had so impaired his trade with the continent of Europe that he was disposing of one of his steamships, and I am not sure that the position, in spite of a fortuitous improvement in international trade, has yet been recovered. It is a fact that Wallsend itself and other places on Tyneside has been turned, since 1932, into a Special Area owing to this identical policy, and now we have the Government attempting to make unilateral agreements in order to reduce, as far as they can, the evil influence of the tariff policy, which the hon. lady is suggesting in this Amendment this Committee should set up. Until the Government abandons its tariff policy—

The Deputy-Chairman: I think the hon. Member is getting rather wide of the Amendment.

Mr. Adams: We are asked to commend a policy which we think is fatal to the

best interests of the nation. However, there it is, and I suggest that two courses should be pursued—to reduce, as soon as we can, the influence of the policy which has been pursued; and secondly, to do what the Government has not yet thought fit to do, have national planning, an inquiry into suitable new industries applicable to the special areas and a complete co-ordination, which I think the hon. lady very easily demonstrated did not exist. We require co-ordination between the various departments of the Government. If that was done, and the Government accepted the Amendment on these lines, it would greatly strengthen the Bill now before the House.

2.54 a.m.

Mr. J. Griffiths: I join with my hon. Friends on this side of the House in regretting that the hon. Lady, the Member for Wallsend (Miss Ward) has spoilt a very good Amendment by bringing in those words "national self-sufficiency". I believe that she represents one of the Special Areas on the North-East coast, and she will know perfectly well that one of the main causes for the special conditions of that Special Area is the fact that during the last ten years, and during the last five years in particular, the whole of Europe has been trying to become nationally self-sufficient. The problem of the Special Areas is particularly a problem of the coal industry. For three generations these areas built up a great export trade and became increasingly more dependent on it, and as a result of the War, and even during the War, through the action of our own country, were compelled to become self-sufficient. One of the best markets for coal was Holland. Holland was a neutral country during the War and because the coal produced in this country, in Northumberland, in Durham, South Wales, in Yorkshire and elsewhere was required for the use of our own country, Holland was told early in the War "you cannot get any more" As a result of the supplies being cut off Holland was faced with the entire collapse of her industrial system, and therefore the Government of Holland proceeded to develop her own coal resources, which she had the good sense to make national property, without having to pay what we shall have to pay shortly. The result was that whereas, before the War, we sent substantial quantities of coal to


Holland, now we send none, all because of the Government's policy of national self-sufficiency. The whole of this tariff system is in no small measure responsible for the position which the hon. Lady presents, because when we seek to become in a measure self-sufficient and prevent goods from coining here—and that is the object of a tariff—we must not think for a moment that other countries are going to sit down and say nothing. They have been retaliating on our coal export trade and the Government are, to a very large measure, responsible for the gravity of the position of these areas because since they came into power they have adopted a tariff policy which is a form of national self-sufficiency.
Many hon. Members who were present deplored the discussion we had in this House, which became almost a bitter discussion, on the question of calcium carbide. The Secretary of State for Scotland, whom I am glad to see here in his place to-night, said "Here is a product of tremendous importance to this country; here is a product which is vital for the whole of our industrial system, and a commodity which is vitally important for the whole of the rearmament programme. Here is calcium carbide. We have no knowledge about it, but if the House rejects this Caledonian Power' Bill, then we as that Government will set up a committee and that committee will investigate and inquire." That means that the Government are so incompetent that the Board of Trade and the research departments know so little about what is a vitally important commodity, upon which our industries depend very largely, that we have to set up a special committee. Then there is that question of oil from coal. From the standpoint of national self-sufficiency, surely one of the most vital commodities is oil, and yet we have the spectacle of the Secretary for Mines, Tuesday after Tuesday, saying in reply to questions, not only from this side but from all sides of the House "I very much regret that I can give no definite reply. We are still in the experimental stage. Billing-ham is still going on but we do not know whether it is a success or not." Germany has given an example of the policy of National self-sufficiency, whereas the Secretary of Mines says we are still in

the experimental stage. Germany is now producing 48 per cent. of the oil she needs by extracting it from coal, and even from lignite coal. Another committee has been set up I gathered from the Parliamentary Secretary to the Board of Trade—a third committee—which is to investigate the problem of food supplies in war time.

The Deputy-Chairman: Whether this Amendment is carried or not that matter can hardly arise upon it.

Mr. Griffiths: I was merely pointing out that in this matter, as in every other matter, the Government are setting up, committees instead of setting up one comprehensive committee to co-ordinate the task of these separate committees, which could do the job in its own way. If we are to have this policy of national self sufficiency and produce our own calcium carbide and our own oil from coal, let us do it in an intelligent manner and not in a chaotic manner. For these reasons I regret the references to self sufficiency and hope that when next such matters as oil from coal come before us it will be realised how very important they are. I have heard hon. Members opposite become very eloquent about the German menace and make speeches about Hitler and the German nation, and how essential it is to have a rearmament policy ready to meet this menace, yet they know perfectly well that if an enemy country cut off our oil supplies, they would have us completely beaten. For these reasons I join with my hon. Friends in expressing the hope that the Government will accept this word of advice from one of their own supporters who, as she has said, has become tired of making intelligent suggestions to a Government which is obviously incapable of receiving them.

Captain Margesson: Captain Margesson rose in his place, and claimed to move. "That the Question be now put".

Question put, "That the Question be now put".

Miss Ward: (seated and covered): May I now beg leave to withdraw the Amendment?

Hon. Members: No.

The Committee divided: Ayes, 119; Noes, 53.

Division No. 149.]
AYES.
[12.57 p.m.


Acland, R. T. D. (Barnstaple)
Davies, C. (Montgomery)
Herbert, Major J. A. (Monmouth)


Adams, S. V. T. (Leeds, W.)
Davies, Major Sir G. F. (Yeovil)
Holdsworth, H.


Agnew, Lieut.-Comdr. P. C.
Dawson, Sir P.
Holmes, J. S.


Albery, Sir Irving
Doland, G. F.
Hopkinson, A.


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Donner, P. W.
Hore-Belisha, Rt. Hon. L.


Aske, Sir R. W.
Dorman-Smith, Major R. H.
Horne, Rt. Hon. Sir R. S.


Assheton, R.
Duncan, J. A. L.
Hudson, Capt. A. U. M. (Hack., N.)


Baldwin-Webb, Col. J.
Eckersley, P. T.
James, Wing-Commander A. W. H.


Balfour, Capt. H. H. (Isle of Thanet)
Elliot, Rt. Hon. W. E.
Joel, D. J. B.


Barclay-Harvey, Sir C. M.
Emery, J. F.
Kerr, J. Graham (Scottish Univs.)


Beaumont, Hon. R. E. B. (Portsm h)
Entwistle, Sir C. F.
Keyes, Admiral of the Fleet Sir R.


Blindell, Sir J.
Errington, E.
Lamb, Sir J. Q.


Boulton, W. W.
Evans, Capt. A. (Cardiff, S.)
Law, R. K. (Hull, S.W.)


Bower, Comdr. R. T.
Findlay, Sir E.
Leckie, J. A.


Bowyer, Capt. Sir G. E. W.
Furness, S. N.
Leighton, Major B. E. P.


Bracken, B.
Fyfe, D. P. M.
Lennox-Boyd, A. T. L.


Braithwaite, Major A. N.
George, Megan Lloyd (Anglesey)
Liddall, W. S.


Brass, Sir W.
Gibson, C. G. (Pudsey and Otley)
Llewellin, Lieut.-Col. J. J.


Brown, Rt. Hon. E. (Leith)
Gilmour, Lt.-Col. Rt. Hon. Sir J.
Loftus, P. C.


Burghley, Lord
Goldie, N. B.
Lyons, A. M.


Campbell, Sir E. T.
Graham, Captain A. C. (Wirral)
Mabane, W. (Huddersfield)


Cartland, J. R. H.
Grant-Ferris, R.
McCorquodale, M. S.


Cary, R. A.
Griffith, F. Kingsley (M'ddl'sbro, W.)
MacDonald, Rt. Hon. M. (Ross)


Castlereagh, Viscount
Grimston, R. V.
McKie, J. H.


Channon, H.
Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)
Macmillan, H. (Stockton-on-Tees)


Churchill, Rt. Hon. Winston S.
Guinness, T. L. E. B.
Macnamara, Capt. J. R. J.


Clarke, Lt.-Col. R. S. (E. Grinstead)
Hannah, I. C.
Manningham-Buller, Sir M.


Cobb, Captain E. C. (Preston)
Hannon, Sir P. J. H.
Margesson, Capt. Rt. Hon. H. D. R.


Colville, Lt.-Col. Rt. Hon. D. J.
Harbord, A.
Markham, S. F.


Courtauld, Major J. S.
Harris, Sir P. A.
Mayhew, Lt.-Col. J.


Craven-Ellis, W.
Hartington, Marquess of
Mellor, Sir J. S. P. (Tamworth)


Crookshank, Capt. H. F. C.
Haslam, H. C. (Horncastle)
Mills, Major J. D. (New Forest)


Crowder, J. F. E.
Heilgers, Captain F. F. A.
Nicolson, Hon. H. G.


Davidson, Rt. Hon. Sir J. C. C.
Hepburn, P. G. T. Buchan-
Patrick, C. M.




Peake, O.
Samuel, M. R. A.
Tree, A. R. L. F.


Peters, Dr. S. J.
Sanderson, Sir F. B.
Tryon, Major Rt. Hon. G. C.


Petherick, M.
Scott, Lord William
Tufnell, Lieut.-Commander R. L.


Procter, Major H. A.
Seely, Sir H. M.
Turton, R. H.


Raikes, H. V. A. M.
Shaw, Major P. S. (Wavertree)
Wakefield, W. W.


Ramsbotham, H.
Smith, Bracewell (Dulwich)
Walker-Smith, Sir J.


Rankin, Sir R.
Southby, Commander A. R. J.
Ward, Lieut.-Col. Sir A. L. (Hull)


Rathbone, J. R. (Bodmin)
Spens, W. P.
Ward, Irene M. B. (Wallsend)


Reid, W. Allan (Derby)
Stourton, Major Hon. J. J.
Waterhouse, Captain C.


Rickards, G. W. (Skipton)
Strauss, E. A. (Southwark, N.)
Watt, G. S. H.


Roberts, W. (Cumberland, N.)
Strickland, Captain W. F.
White, H. Graham


Robinson, J. R. (Blackpool)
Stuart, Hon. J. (Moray and Nairn)
Williams, H. G. (Croydon, S.)


Ropner, Colonel L.
Sueter, Rear-Admiral Sir M. F.
Wise, A. R.


Ross Taylor, W. (Woodbridge)
Sutcliffe, H.
Wragg, H.


Russell, A. West (Tynemouth)
Taylor, Vice-Adm. E. A. (Padd., S.)



Russell, S. H. M. (Darwen)
Thomas, J. P. L.
TELLERS FOR THE AYES.—


Salt, E. W.
Touche, G. C.
Sir Henry Morris Jones and




Captain Hope.




NOES.


Adams, D. (Consett)
Griffiths, J. (Llanelly)
Ritson, J.


Adamson, W. M.
Hall, J. H. (Whitechapel)
Rowson, G.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Hayday, A.
Sexton, T. M.


Barr, J.
Henderson, J. (Ardwick)
Shinwell, E.


Batey, J.
Jagger, J.
Simpson, F. B.


Bevan, A.
Jenkins, A. (Pontypool)
Smith, Ben (Rotherhithe)


Burke, W. A.
Jenkins, Sir W. (Neath)
Smith, E. (Stoke)


Cocks, F. S.
Kelly, W. T.
Smith, T. (Normanton)


Cripps, Hon. Sir Stafford
Leslie, J. R.
Stephen, C.


Daggar, G.
Macdonald, G, (Ince)
Stewart, W. J. (H'ght'n-le-Sp'ng)


Dalton, H.
McEntee, V. La T.
Strauss, G. R. (Lambeth, N.)


Davidson, J. J. (Maryhill)
MacLaren, A.
Taylor, R. J. (Morpeth)


Dobbie, W.
MacMillan, M. (Western Isles)
Tinker, J. J.


Dunn, E. (Rother Valley)
Maxton, J.
Watson, W. McL.


Ede, J. C.
Parkinson, J. A.
Windsor, W. (Hull, C.)


Edwards, Sir C. (Bedwellty)
Potts, J.
Woods, G. S. (Finsbury)


Frankel, D.
Price, M. P.



Grenfell, D. R.
Pritt, D. N.
TELLERS FOR THE NOES.—




Mr. Mathers and Mr. Groves.

Division No. 150.]
AYES.
[3.5 a.m.


Agnew, Lieut.-Comdr. P. G.
Graham, Captain A. C. (Wirral)
Petherick, M.


Albery, Sir Irving
Grant-Ferris, R.
Plugge, Capt. L. F.


Allen, Lt.-Col. J. Sandeman (B kn hd)
Grimston, R. V.
Procter, Major H. A.


Aske, Sir R. W.
Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)
Raikes, H. V. A. M.


Assheton, R.
Guinness, T. L. E. B.
Rathbone, J. R. (Bodmin)


Balfour, Capt. H. H. (Isle of Thanet)
Gunston, Capt. D. W.
Reid, W. Allan (Derby)


Barclay-Harvey, Sir C. M.
Hannah, I. C.
Rickards, G. W. (Skipton)


Beaumont, Hon. R. E. B. (Portsm'h)
Hannon, Sir P. J. H.
Robinson, J. R. (Blackpool)


Blinded, Sir J.
Harbord, A.
Ropner, Colonel L.


Boulton, W. W.
Heilgers, Captain F. F. A.
Ross Taylor, W. (Woodbridge)


Bower, Comdr. R. T.
Hepburn, P. G. T. Buchan-
Salt, E. W.


Bowyer, Capt. Sir G. E. W.
Herbert, Major J. A. (Monmouth)
Samuel, M. R. A.


Braithwaite, Major A. N.
Holmes, J. S.
Sanderson, Sir F. B.


Brass, Sir W.
Hope, Captain Hon. A. O. J.
Scott, Lord William


Brown, Rt. Hon. E. (Leith)
Hopkinson, A.
Shaw, Major P. S. (Wavertree)


Burghley, Lord
Hudson, Capt. A. U. M. (Hack., N.)
Smith, Bracewell (Dulwich)


Campbell, Sir E. T.
James, Wing-Commander A. W. H.
Southby, Commander A. R. J.


Cartland, J. R. H.
Joel, D. J. B.
Stourton, Major Hon. J. J.


Cary, R. A.
Kerr, J. Graham (Scottish Univs.)
Strauss, E. A. (Southwark, N.)


Castlereagh, Viscount
Law, R. K. (Hull, S.W.)
Strickland, Captain W. F.


Channon, H.
Leckie, J. A.
Sutcliffe, H.


Clarke, Lt.-Col. R. S. (E. Grinstead)
Leighton, Major B. E. P.
Tate, Mavis C.


Cobb, Captain E. C. (Preston)
Lennox-Boyd, A. T. L.
Taylor, Vice-Adm. E. A. (Padd., S.)


Colville, Lt.-Col. Rt. Hon. D. J.
Liddall, W. S.
Thomas, J. P. L.


Courtauld, Major J. S.
Llewellin, Lieut.-Col. J. J.
Touche, G. C.


Crookshank, Capt. H. F. C.
Loftus, P. C.
Tree, A. R. L. F.


Crowder, J. F. E.
Mabane, W. (Huddersfield)
Tufnell, Lieut.-Commander R. L.


Davidson, Rt. Hon. Sir J. C. C.
McCorquodale, M. S.
Turton, R. H.


Dawson, Sir P.
MacDonald, Rt. Hon. M. (Ross)
Wakefield, W. W.


Doland, G. F.
McKie, J. H.
Walker-Smith, Sir J.


Dorman-Smith, Major R. H.
Macmillan, H. (Stockton-on-Tees)
Ward, Lieut.-Col. Sir A. L. (Hull)


Duncan, J. A. L.
Macnamara, Capt. J. R. J.
Ward, Irene M. B. (Wallsend)


Eckersley, P. T.
Margesson, Capt. Rt. Hon. H. D. R.
Waterhouse, Captain C.


Elliot, Rt. Hon. W. E.
Mayhew, Lt.-Col. J.
Watt, G. S. H.


Emery, J. F.
Mellor, Sir J. S. P. (Tamworth)
Williams, H. G. (Croydon, S.)


Evans, Capt. A. (Cardiff, S.)
Mills, Major J. D. (New Forest)
Wise, A. R.


Everard, W. L.
Morris-Jonas, Sir Henry
Wragg, H.


Findlay, Sir. E.
Nicolson, Hon. H. G.



Furness, S. N.
Patrick, C. M.
TELLERS FOR THE AYES.—


Fyfe, D. P. M.
Peake, O.
Major Sir George Davies and Mr.


Goldie, N. B.
Peters, Dr. S. J.
James Stuart.




NOES.


Acland, R. T. D. (Barnstaple)
Griffith, F. Kingsley (M'ddl'sbro, W.)
Roberts, W. (Cumberland, N.)


Adams, D. (Consett)
Griffiths, J. (Llanelly)
Seely, Sir H. M.


Adamson, W. M.
Hall, J. H. (Whitechapel)
Sexton, T. M.


Barr, J.
Henderson, J. (Ardwick)
Shinwell, E.


Batey, J.
Jagger, J.
Simpson, F. B.


Bevan, A.
Jenkins, A. (Pontypool)
Smith, Ben (Rotherhithe)


Burke, W. A.
Jenkins, Sir W. (Neath)
Smith, E. (Stoke)


Cooks, F. S.
Kelly, W. T.
Smith, T. (Normanton)


Cripps, Hon. Sir Stafford
Lawson, J. J.
Stephen, C.


Daggar, G.
Leslie, J. R.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Dalton, H.
Macdonald, G. (Ince)
Taylor, R. J. (Morpeth)


Davidson, J. J. (Maryhill)
McEntee, V. La T.
Tinker, J. J.


Dobbie, W.
MacMillan, M. (Western Isles)
Watson, W. McL.


Dunn, E. (Rother Valley)
Maxton, J.
Windsor, W. (Hull, C.)


Edo, J. C.
Parkinson, J. A.
Woods, G. S. (Finsbury)


Edwards, A. (Middlesbrough E.)
Potts, J.



Edwards, Sir C. (Bedwellty)
Price, M. P.
TELLERS FOR THE NOES.—


Frankel, D.
Pritt, D. N.
Mr. Mathers and Mr. Groves.


George, Megan Lloyd (Anglesey)
Ritson, J.

Question, "That those words be there inserted," put accordingly, and nagatived.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. Shinwell: Mr. Shinwell rose—

Captain Margesson: Captain Margesson rose in his place, and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The Committee divided: Ayes, 177; Noes, 54.

Division No. 151.]
AYES.
[3.15 a.m.


Agnew, Lieut.-Comdr. P. G.
Balfour, Capt. H. H. (Isle of Thanet)
Bowyer, Capt. Sir G. E. W.


Albery, Sir Irving
Barclay-Harvey, Sir C. M.
Braithwaite, Major A. N.


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Beaumont, Hon. R. E. B. (Pertsm'h)
Brass, Sir W.


Aske, Sir R. W.
Blindell, Sir J.
Brown, Rt. Hon. E. (Leith)


Assheton, R.
Boulton, W. W.
Burghley, Lord




Campbell, Sir E. T.
Hepburn, P. G. T. Buchan-
Reid, W. Allan (Derby)


Cartland, J. R. H.
Herbert, Major J. A. (Monmouth)
Rickards, G. W. (Skipton)


Cary, R. A.
Holmes, J. S.
Robinson, J. R. (Blackpool)


Castlereagh, Viscount
Hope, Captain Hon. A. O. J.
Ropner, Colonel L.


Channon, H.
Hopkinson, A.
Ross Taylor, W. (Woodbridge)


Clarke, Lt.-Col. R. S. (E. Grinstead)
Hudson, Capt. A. U. M. (Hack., N.)
Salt, E. W.


Cobb, Captain E. C. (Preston)
James, Wing-Commander A. W. H.
Samuel, M. R. A.


Colville, Lt.-Col. Rt. Hon. D. J.
Joel, D. J. B.
Sanderson, Sir F. B.


Courtauld, Major J. S.
Kerr, J. Graham (Scottish Univs.)
Scott, Lord William


Crookshank, Capt. H. F. C.
Law, R. K. (Hull, S.W.)
Shaw, Major P. S. (Wavertree)


Crowder, J. F. E.
Leckie, J. A.
Smith, Bracewell (Dulwich)


Davidson, Rt. Hon. Sir J. C. C.
Leighton, Major B. E. P.
Southby, Commander A. R. J.


Dawson, Sir P.
Lennox-Boyd, A. T. L.
Stourton, Major Hon. J. J.


Doland, G. F.
Liddall, W. S.
Strauss, E. A. (Southwark, N.)


Dorman-Smith, Major R. H.
Llewellin, Lieut.-Col. J. J.
Strickland, Captain W. F.


Duncan, J. A. L.
Loftus, P. C.
Sutcliffe, H.


Eckersley, P. T.
Mabane, W. (Huddersfield)
Tate, Mavis C.


Elliot, Rt. Hon. W. E.
McCorquodale, M. S.
Taylor, Vice-Adm. E. A. (Padd., S.)


Emery, J. F.
MacDonald, Rt. Hon. M. (Ross)
Thomas, J. P. L.


Evans, Capt. A. (Cardiff, S.)
McKie, J. H.
Touche, G. C.


Everard, W. L.
Macnamara, Capt. J. R. J.
Tree, A. R. L. F.


Findlay, Sir E.
Margesson, Capt. Rt. Hon. H. D. R.
Tufnell, Lieut.-Commander R. L.


Furness, S. N.
Mayhew, Lt.-Col. J.
Turton, R. H.


Fyfe, D. P. M.
Mellor, Sir J. S. P. (Tamworth)
Wakefield, W. W.


Goldie, N. B.
Mills, Major J. D. (New Forest)
Walker-Smith, Sir J.


Graham, Captain A. C. (Wirral)
Morris-Jones, Sir Henry
Ward, Lieut.-Col. Sir A. L. (Hull)


Grant-Ferris, R.
Nicolson, Hon. H. G.
Ward, Irene M. B. (Wallsend)


Grimston, R. V.
Patrick, C. M.
Waterhouse, Captain C.


Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)
Peake, O.
Watt, G. S. H.


Guinness, T. L. E. B.
Peters, Dr. S. J.
Williams, H. G. (Croydon, S.)


Gunston, Capt. D. W.
Petherick, M.
Wise, A. R.


Hannah, I. C.
Plugge, Capt. L. F.
Wragg, H.


Hannon, Sir P. J. H.
Procter, Major H. A.



Harbord, A.
Raikes, H. V. A. M.
TELLERS FOR THE AYES.—


Heilgers, Captain F. F. A.
Rathbone, J. R. (Bodmin)
Major Sir George Davies and Mr. James Stuart.




NOES.


Acland, R. T. D. (Barnstaple)
Griffith, F. Kingsley (M'ddl'sbro, W.)
Roberts, W. (Cumberland. N.)


Adams, D. (Consett)
Griffiths, J. (Llanelly)
Seely, Sir H. M.


Adamson, W. M.
Hall, J. H. (Whitechapel)
Sexton. T. M.


Barr, J.
Henderson, J. (Ardwick)
Shinwell, E.


Batey, J.
Jagger, J.
Simpson, F. B.


Bevan, A.
Jenkins, A. (Pontypool)
Smith, Ben (Rotherhithe)


Burke, W. A.
Jenkins, Sir W. (Neath)
Smith, E. (Stoke)


Cocks, F. S.
Kelly, W. T.
Smith, T. (Normanton)


Cripps, Hon. Sir Stafford
Lawson, J. J.
Stephen, C.


Daggar, G.
Leslie, J. R.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Dalton, H.
Macdonald, G. (Ince)
Taylor, R. J. (Morpeth)


Davidson, J. J. (Maryhill)
McEntee, V. La T.
Tinker, J. J.


Dobbie, W.
MacMillan, M. (Western Isles)
Watson, W. McL.


Dunn, E. (Rother Valley)
Maxton, J.
Windsor, W. (Hull, C.)


Ede, J. C.
Parkinson, J. A.
Woods, G. S. (Finsbury)


Edwards, A. (Middlesbrough E.)
Potts, J.



Edwards, Sir C. (Bedwellty)
Price, M. P.
TELLERS FOR THE NOES.—


Frankel, D.
Pritt, D. N.
Mr. Mathers and Mr. Groves.


George, Megan Lloyd (Anglesey)
Ritson, J.

Question put accordingly, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 119; Noes, 53.

Division No. 152.]
AYES.
[3.24 a.m.


Agnew, Lieut.-Comdr. P. G.
Cary, R. A.
Evans, Capt. A. (Cardiff, S.)


Albary, Sir Irving
Castlereagh, Viscount
Everard, W. L.


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Channon, H.
Findlay, Sir E.


Aske, Sir R. W.
Clarke, Lt.-Col. R. S. (E. Grinstead)
Furness, S. N.


Assheton, R.
Cobb, Captain E. C. (Preston)
Fyfe, D. P. M.


Balfour, Capt. H. H. (Isle of Thanet)
Colville, Lt.-Col. Rt. Hon. D. J.
Goldie, N. B.


Barclay-Harvey, Sir C. M.
Courtauld, Major J. S.
Graham, Captain A. C. (Wirral)


Beaumont, Hon. R. E. B. (Portsm'h)
Crookshank, Capt. H. F. C.
Grant-Ferris, R.


Blindell, Sir J.
Crowder, J. F. E.
Grimston, R. V.


Boulton, W. W.
Davidson, Rt. Hon. Sir J. C. C.
Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)


Bower, Comdr. R. T.
Davies, Major Sir G. F. (Yeovil)
Guinness, T. L. E. B.


Bowyer, Capt. Sir G. E. W.
Dawson, Sir P.
Gunston, Capt. D. W.


Braithwaite, Major A. N.
Doland, G. F.
Hannah, I. C.


Brass, Sir W.
Dorman-Smith, Major R. H.
Hannon, Sir P. J. H.


Brown, Rt. Hon. E. (Leith)
Duncan, J. A. L.
Harbord, A.


Burghley, Lord
Eckersley, P. T.
Heilgers, Captain F. F. A.


Campbell, Sir E. T.
Elliot, Rt. Hon. W. E.
Hepburn, P. G. T. Buchan-


Cartland, J. R. H.
Emery, J. F.
Herbert, Major J. A. (Monmouth)




Holmes, J. S.
Morris-Jones, Sir Henry
Strauss, E. A. (Southwark, N.)


Hope, Captain Hon. A. O. J.
Nicolson, Hon. H. G.
Strickland, Captain W. F.


Hopkinson, A.
Patrick, C. M.
Sutcliffe, H.


Hudson, Capt. A. U. M. (Hack., N.)
Peake, O.
Tate, Mavis C.


James, Wing-Commander A. W. H.
Peters, Dr. S. J.
Taylor, Vice-Adm. E. A. (Padd., S.)


Joel, D. J. B.
Petherick, M.
Thomas, J. P. L.


Kerr, J. Graham (Scottish Univs.)
Plugge, Capt. L. F.
Touche, G. C.


Law, R. K. (Hull, S.W.)
Procter, Major H. A.
Tree, A. R. L. F.


Leckie, J. A.
Raikes, H. V. A. M.
Tufnell, Lieut.-Commander R. L.


Leighton, Major B. E. P.
Rathbone, J. R. (Bodmin)
Turton, R. H.


Lennox-Boyd, A. T. L.
Reid, W. Allan (Derby)
Wakefield, W. W.


Liddall, W. S.
Rickards, G. W. (Skipton)
Walker-Smith, Sir J.


Loftus, P. C.
Robinson, J. R. (Blackpool)
Ward, Lieut.-Col. Sir A. L. (Hull)


Mabane, W. (Huddersfield)
Ropner, Colonel L.
Ward, Irene M. B. (Wallsend)


McCorquodale, M. S.
Ross Taylor, W. (Woodbridge)
Waterhouse, Captain C.


MacDonald, Rt. Hon. M. (Ross)
Salt, E. W.
Watt, G. S. H.


McKie, J. H.
Samuel, M. R. A.
Williams, H. G. (Croydon, S.)


Macmillan, H. (Stockton-on-Tees)
Sanderson, Sir F. B.
Wise, A. R.


Macnamara, Capt. J. R. J.
Scott, Lord William
Wragg, H.


Margesson, Capt. Rt. Hon. H. D. R.
Shaw, Major P. S. (Wavertree)



Mayhew, Lt.-Col. J.
Smith, Bracewell (Dulwich)
TELLERS FOR THE AYES.—


Mellor, Sir J. S. P. (Tamworth)
Southby, Commander A. R J.
Mr. James Stuart and Lieut.- Colonel Llewellin.


Mills, Major J. D. (New Forest)
Stourton, Major Hon. J. J





NOES.


Acland, R. T. D. (Barnstaple)
Griffith, F. Kingsley (M'ddl'sbro, W.)
Roberts, W. (Cumberland, N.)


Adams, D. (Cansett)
Griffiths, J. (Llanelly)
Seely, Sir H. M.


Adamson, W. M.
Hall, J. H. (Whitechapel)
Sexton, T. M.


Barr, J.
Henderson, J. (Ardwick)
Shinwell, E.


Batey, J.
Jagger, J.
Simpson, F. B.


Bevan, A.
Jenkins, A. (Pontypool)
Smith, Ben (Rotherhithe)


Burke, W. A.
Jenkins, Sir W. (Neath)
Smith, E. (Stoke)


Cocks, F. S.
Kelly, W. T.
Smith, T. (Normanton)


Cripps, Hon. Sir Stafford
Lawson, J. J.
Stephen, C.


Daggar, G.
Leslie, J. R.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Dalton, H.
Macdonald, G. (Ince)
Taylor, R. J. (Morpeth)


Davidson, J. J. (Maryhill)
McEntee, V. La T.
Tinker, J. J.


Dobbie, W.
MacMillan, M. (Western Isles)
Watson, W. McL.


Dunn, E. (Rother Valley)
Maxton, J.
Windsor, W. (Hull, C.)


Ede, J. C.
Parkinson, J. A.
Woods, G. S. (Finsbury)


Edwards, A. (Middlesbrough E.)
Potts, J.



Edwards, Sir C. (Bedwellty)
Price, M. P.
TELLERS FOR THE NOES.—


Frankel, D.
Pritt, D. N.
Mr. Groves and Mr. Mathers.


George, Megan Lloyd (Anglesey)
Ritson, J.

Mr. Shinwell: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
I would like to draw attention to the fact that the Patronage Secretary, in quite an unwarranted and indeed amazing fashion, rose when I was standing at this Box to take part in the Debate that Clause 3 stand part of the Bill, and moved the Closure. That was more particularly ungracious in view of the fact that the

Amendment upon which the closure had been moved—

The Chairman: I think the hon. Member is forgetting our rules of Procedure. He cannot discuss the Closure.

Question put, "That the Chairman do report Progress, and ask leave to sit again."

The Committee divided: Ayes, 54; Noes, 118.

Division No. 153.]
AYES.
[3.34 a.m.


Acland, R. T. D. (Barnstaple)
George, Megan Lloyd (Anglesey)
Pritt, D. N.


Adams, D. (Consett)
Griffith, F. Kingsley (M'ddl'sbro, W.)
Ritson, J.


Adams, S. V. T. (Leeds, W.)
Griffiths, J. (Llanelly)
Roberts, W. (Cumberland, N.)


Adamson, W. M.
Hall, J. H. (Whitechapel)
Seely, Sir H. M.


Barr, J.
Henderson, J. (Ardwick)
Sexton, T. M.


Batey, J.
Jagger, J.
Shinwell, E.


Bevan, A.
Jenkins, A. (Pontypool)
Simpson, F. B.


Burke, W. A.
Jenkins, Sir W. (Neath)
Smith, Ben (Rotherhithe)


Cocks, F. S.
Kelly, W. T.
Smith, E. (Stoke)


Cripps, Hon. Sir Stafford
Lawson, J. J.
Smith, T. (Normanton)


Daggar, G.
Leslie, J. R.
Stephen, C.


Dalton, H.
Macdonald, G. (Ince)
Stewart, W. J. (H'ght'n-le-Sp'ng)


Davidson, J. J. (Maryhill)
McEntee, V. La T.
Taylor, R. J. (Morpeth)


Dobbie, W.
Macmillan, H. (Stockton-on-Tees)
Tinker, J. J.


Dunn, E. (Rother Valley)
MacMillan, M. (Western Isles)
Watson, W. McL.


Ede, J. C.
Maxton, J.
Windsor, W. (Hull, C.)


Edwards, A. (Middlesbrough E.)
Parkinson, J. A.
Woods, G. S. (Finsbury)


Edwards, Sir C. (Bedwellty)
Potts, J.



Frankel, D.
Price, M. P.
TELLERS FOR THE AYES.—




Mr. Groves and Mr. Mathers.




NOES.


Agnew, Lieut.-Comdr. P. G.
Goldie, N. B.
Petherick, M.


Albery, Sir Irving
Graham, Captain A. C. (Wirral)
Plugge, Capt. L. F.


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Grant-Ferris, R.
Procter, Major H. A.


Aske, Sir R. W.
Grimston, R. V.
Raikes, H. V. A. M.


Assheton, R.
Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)
Rathbone, J. R. (Bodmin)


Balfour, Capt. H. H. (Isle of Thanet)
Guinness, T. L. E. B.
Reid, W. Allan (Derby)


Barclay-Harvey, Sir C. M.
Gunston, Capt. D. W.
Rickards, G. W. (Skipton)


Beaumont, Hon. R. E. B. (Portsm'h)
Hannah, I. C.
Robinson, J. R. (Blackpool)


Blindell, Sir J.
Hannon, Sir P. J. H.
Ropner, Colonel L.


Boulton, W. W.
Harbord, A.
Ross Taylor, W. (Woodbridge)


Bower, Comdr. R. T.
Heilgers, Captain F. F. A.
Salt, E. W.


Bowyer, Capt. Sir G. E. W.
Hepburn, P. G. T. Buchan-
Samuel, M. R. A.


Braithwaite, Major A. N.
Herbert, Major J. A. (Monmouth)
Sanderson, Sir F. B.


Brass, Sir W.
Holmes, J. S.
Scott, Lord William


Brown, Rt. Hon. E. (Leith)
Hope, Captain Hon. A. O. J.
Shaw, Major P. S. (Wavertree)


Burghley, Lord
Hopkinson, A.
Smith, Bracewell (Dulwich)


Campbell, Sir E. T.
Hudson, Capt. A. U. M. (Hack., N.)
Southby, Commander A. R. J.


Cartland, J. R. H.
James, Wing-Commander A. W. H.
Stourton, Major Hon. J. J.


Cary, R. A.
Joel, D. J. B.
Strauss, E. A. (Southwark, N.)


Castlereagh, Viscount
Kerr, J. Graham (Scottish Univs.)
Strickland, Captain W. F.


Channon, H.
Law, R. K. (Hull, S.W.)
Sutcliffe, H.


Clarke, Lt.-Col. R. S. (E. Grinstead)
Leckie, J. A.
Tate, Mavis C.


Cobb, Captain E. C. (Preston)
Leighton, Major B. E. P.
Taylor, Vice-Adm. E. A. (Padd., S.)


Colville, Lt.-Col. Rt. Hon. D. J.
Lennox-Boyd, A. T. L.
Thomas, J. P. L.


Courtauld, Major J. S.
Liddall, W. S.
Touche, G. C.


Crookshank, Capt. H. F. C.
Llewellin, Lieut.-Col. J. J,
Tree, A. R. L. F.


Crowder, J. F. E.
Loftus, P. C.
Tufnell, Lieut.-Commander R. L.


Davidson, Rt. Hon. Sir J. C. C.
Mabane, W. (Huddersfield)
Turton, R. H.


Davies, Major Sir G. F. (Yeovil)
McCorquodale, M. S.
Wakefield, W. W.


Dawson, Sir P.
MacDonald, Rt. Hon. M. (Ross)
Walker-Smith, Sir J.


Doland, G. F.
McKie, J. H.
Ward, Lieut.-Col. Sir A. L. (Hull)


Dorman-Smith, Major R. H.
Macnamara, Capt. J. R. J.
Ward, Irene M. B. (Wallsend)


Duncan, J. A. L.
Margesson, Capt. Rt. Hon. H. D. R.
Watt, G. S. H.


Eckersley, P. T.
Mayhew, Lt.-Col. J.
Williams, H. G. (Croydon, S.)


Elliot, Rt. Hon. W. E.
Mellor, Sir J. S. P. (Tamworth)
Wise, A. R.


Emery, J. F.
Mills, Major J. D. (New Forest)
Wragg, H.


Evans, Capt. A. (Cardiff, S.)
Morris-Jones, Sir Henry



Everard, W. L.
Nicolson, Hon. H. G.
TELLERS FOR THE NOES.—


Findlay, Sir E.
Patrick, C. M.
Mr. James Stuart and Captain


Furness, S. N.
Peake, O.
Waterhouse.


Fyfe, D. P. M.
Peters, Dr. S. J.

3.42 a.m.

Mr. Shinwell: I beg to move, "That the Chairman do now leave the Chair."
I wish to make it quite clear that in doing so I pass no reflection on yourself personally, but do so as the only means of protesting against the ungovernable conduct of the Patronage Secretary in intervening at a time when clearly there was no warrant for doing so.

The Chairman: I cannot accept the Motion.

Mr. Shinwell: On a point of Order. I have consulted the records of the House. and I wish to draw your attention to the fact that on 7th June, 1858—I believe the last occasion when there was a Motion to report Progress followed by a Motion "That the Chairman do now leave the Chair "—although there I am open to correction—the Question of reporting Progress having been negatived, the Committee, some time afterwards, was prepared to assent to such a Motion. That being so, it appears to me that the Motion is in order.

The Chairman: If the hon. Member will refer to Standing Orders he will find that the Chairman has power to decline to put the Question.

Mr. Shinwell: Further to the point of Order. If the Chairman declines to accept such a Motion, then may I ask for your guidance as to what remedy is in the possession of hon. Members on this side of the Committee in order to deal with a situation in which the Patronage Secretary and apparently the Chairman are involved.

The Chairman: There is no remedy that I can suggest to the hon. Member.

3.44 a.m.

Mr. Stephen: I would like to draw your attention, not to a reference to the last century, but to the most recent example, which was on 27th May, 1930, when the Motion was made "That the Chairman do now leave the Chair." Perhaps I may be allowed to read one or two sentences. The position was then taken after the Motion which was made


by the right hon. Gentleman the Member for Epping (Mr. Churchill). He said:
I rise to a point of order. I wish to ask from you at this stage some further guidance as to the conditions under which we are permitted to conduct our debate and under what conditions Members of this House are to be permitted to deliver their speeches and criticisms, if at all. In order to put myself in order I propose to conclude by moving under Rule 68—
I think the right hon. Gentleman went wrong. It should be Rule 67. Under that Rule 67 I take it that the discretion is within the power of the Chairman, if the Chairman believes that it is an abuse of the Standing Orders of the House to refuse to accept the Motion. I am sorry that before the motion was moved I did not raise another point of Order if you regard a Motion to report Progress as an abuse of the Standing Orders of the House after we had been on the debate during all this time, and this is the first attempt to report progress—but that is beside the point.

The Chairman: I am afraid that the rest of the hon. Member's point was that he appears to be reporting a case in which the Chair was accepting the Motion, but in this case I am not.

Mr. Stephen: I had only got to the length of contending that it is true that on the original occasion the right to decline the Motion is only if the Chairman is of opinion that the Motion is an abuse of Standing Orders. The point of Order I am now wanting to put is that if in giving your refusal you are regarding the Motion as an abuse of the Standing Orders, then I understand that the only procedure for the Opposition is to put the Motion on the Paper for discussion.

The Chairman: The hon. Member now seems to be trying to discuss the conduct of the Chair.

Mr. Maxton: May I say, that I do not see that there is any reason why this should be hurried or rushed. I have been in his Committee since the Comrnittee—

The Chairman: I do not know what the hon. Member means by saying that this should not be rushed. There is no Question before the Committee at the moment.

Mr. Maxton: There is a point of Order.

The Chairman: There is no point of Order, because I have ruled on the point of Order which has been raised. If the hon. Member has another point of Order, of course I will hear it.

Mr. Stephen: Just a minute.

The Chairman: On the point raised by the hon. Member for Camlachie (Mr. Stephen), I have given my decision.

Mr. Stephen: On this point, with all respect, I asked you a specific question in respect of a Standing Order, and I am quite willing to accept your ruling, but surely I am entitled to the courtesy of a reply to my question? If the Chair is ruling that this Motion is an abuse of the Standing Orders of the House, if I can get an answer indicating where we are—

The Chairman: The hon. Member must assume that.

Mr. Maxton: I wish to ask a further point of Order on this, the first convenient opportunity. Is it your ruling that the Motion to report Progress was also an abuse of the Rules of this House, rules which are here for the protection of Members?

The Chairman: The hon. Member cannot now raise that point. He is apparently endeavouring to discuss the conduct of the Chair, and that he cannot do.

Mr. Maxton: I am asking a simple question.

The Chairman: Order.

Mr. Maxton: I am putting a point of Order. It is I who hold the Floor and not you, Sir.

The Chairman: Clause 4.

Hon. Members: No.

Mr. Bevan: Leave the Chair. Your conduct has been abominable.

The Chairman: I must ask the hon. Member immediately to withdraw that remark.

Mr. Bevan: I say I have been in this House for seven years and your conduct has been abominable. I have never seen anything as bad.

The Chairman: I must again request the hon. Member to withdraw that.

Mr. Bevan: I say your conduct has been abominable in the Committee tonight, and I refuse to withdraw what is true.

The Chairman: I name the hon. Member for Ebbw Vale for disregarding the authority of the Chair.

The CHAIRMAN then left the Chair to report the circumstances to the House.

Mr. SPEAKER resumed the Chair, and the CHAIRMAN reported that Mr. BEVAN had been named by him to the Committee as disregarding the authority of the CHAIR.

Mr. E. Brown: I beg to move, "That Mr. Bevan be suspended from the service of the House."

4.1 a.m.

Mr. Shinwell: On a point of Order. May I ask your guidance, Mr. Speaker, before you put the Motion? At this early hour in the morning it may well be that that there are extenuating circumstances which might be taken into account to induce you not to put the Motion. I understand that it is within your discretion whether the Motion is put or not, and, that being so, I ask whether it is possible in the circumstances, having regard to what occurred prior to your being called, that you might not find it necessary to put the Question.

Mr. Speaker: Under the Standing Order I have no power but to put the Motion.

4.3 a.m.

Mr. Maxton: On a point of Order. I am very anxious to have an opportunity of raising this. It has been the practice in this House that when a Member has offended against the Chair, before the Motion has been put, an opportunity has been given by the Chair to the Member to withdraw from the Chamber. I want to ask you, Sir, whether, under the appropriate Rule of the House, that opportunity will be extended to the lion. Member for Ebbw Vale before the Motion is made for his suspension from the House. The appropriate Rule says:
The Speaker or the Chairman of the Committee of the Whole House may order any Member whose conduct is grossly disorderly to withdraw immediately from the House.
I want to put it to you that on the occasions that I can remember occurring in the past that was the usual practice, and I want to ask you if that practice could be adopted in these particular circumstances in which we find ourselves.

Mr. Speaker: No. The Standing Order is quite clear. When I resume the Chair, the only thing I can do is to accept the Motion and put it forthwith to the House.

Question put, "That Mr. Bevan be suspended from the service of the House."

The Committee divided: Ayes, 199; Noes, 43.

Division No. 154.]
AYES.
[4.7 a.m.


Acland, R. T. D. (Barnstaple)
Duncan, J. A. L.
Liddall, W. S.


Agnew, Lieut.-Comdr. P. G.
Eckersley, P. T.
Llewellin, Lieut.-Col. J. J.


Albery, Sir Irving
Elliot, Rt. Hon. W. E.
Loftus, P. C.


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Emery, J. F.
Mabane, W. (Huddersfield)


Aske, Sir R. W.
Evans, Capt. A. (Cardiff, S.)
McCorquodale, M. S.


Assheton, R.
Everard, W. L.
MacDonald, Rt. Hon. M. (Ross)


Balfour, Capt. H. H. (Isle of Thanet)
Findlay, Sir E.
McKie, J. H.


Barclay-Harvey, Sir G. M.
Furness, S. N.
Macnamara, Capt. J. R. J.


Beaumont, Hon. R. E. B. (Portsm'h)
Fyfe, D. P. M.
Margesson, Capt. Rt. Hon. H. D. R.


Blindell, Sir J.
Goldie, N. B.
Mayhew, Lt.-Col. J.


Boulton, W. W.
Graham, Captain A. C. (Wirral)
Mellor, Sir J. S. P. (Tamworth)


Bower, Comdr. R. T.
Grant-Ferris, R.
Mills, Major J. D. (New Forest)


Bowyer, Capt. Sir G. E. W.
Grimston, R. V.
Patrick, C. M.


Braithwaite, Major A. N.
Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)
Peake, O.


Brass, Sir W.
Guinness, T. L. E. B.
Peters, Dr. S. J.


Brown, Rt. Hon. E. (Leith)
Gunston, Capt. D. W.
Petherick, M.


Burghley, Lord
Hannah, I. C.
Plugge, Capt. L. F.


Campbell, Sir E. T.
Hannon, Sir P. J. H.
Procter, Major H. A.


Cartland, J. R. H.
Harbord, A.
Raikes, H. V. A. M.


Cary, R. A.
Heilgers, Captain F. F. A.
Rathbone, J. R. (Bodmin)


Castlereagh, Viscount
Hepburn, P. G. T. Buchan-
Reid, W. Allan (Derby)


Channon, H.
Herbert, Major J. A. (Monmouth)
Rickards, G. W. (Skipton)


Clarke, Lt.-Col. R. S. (E. Grinstead)
Holmes, J. S.
Robinson, J. R. (Blackpool)


Cobb, Captain E. C. (Preston)
Hope, Captain Hon. A. O. J.
Ropner, Colonel L.


Colville, Lt.-Col. Rt. Hon. D. J.
Hopkinson, A.
Ross Taylor, W. (Woodbridge)


Courtauld, Major J. S.
Hudson, Capt. A. U. M. (Hack., N.)
Salt, E. W.


Crookshank, Capt. H. F. C.
James, Wins-Commander A. W. H.
Samuel, M. R. A.


Crowder, J. F. E.
Joel, D. J. B.
Sanderson, Sir F. B.


Davidson, Rt. Hon. Sir J. C. C.
Kerr, J. Graham (Scottish Univs.)
Scott, Lord William


Davies, Major Sir G. F. (Yeovil)
Law, R. K. (Hull, S.W.)
Seely, Sir H. M.


Dawson, Sir P.
Leckie, J. A.
Shaw, Major P. S. (Wavertree)


Doland, G. F.
Leighton, Major B. E. P.
Smith, Bracewell (Dulwich)


Dorman-Smith, Major R. H.
Lennox-Boyd, A. T. L.
Southby, Commander A. R. J.




Stourton, Major Hon. J. J.
Tree, A. R. L. F.
Watt, G. S. H.


Strauss, E. A. (Southwark, N.)
Tufnell, Lieut.-Commander R. L.
Williams, H. G. (Croydon, S.)


Strickland, Captain W. F.
Turton, R. H.
Wise, A. R.


Sutcliffe, H.
Wakefield, W. W.
Wragg, H.


Tate, Mavis C.
Walker-Smith, Sir J.
TELLERS FOR THE AYES.—


Taylor, Vice-Adm. E. A. (Padd., S.)
Ward, Lieut.-Col. Sir A. L. (Hull)
Sir Henry Morris-Jones and Mr.


Thomas, J. P. L.
Ward, Irene M. B. (Wallsend)
James Stuart.


Touche, G. C.
Waterhouse, Captain C.





NOES.


Adams, D. (Consett)
Hall, J. H. (Whitechapel)
Pritt, D. N.


Adamson, W. M.
Henderson, J. (Ardwick)
Ritson, J.


Barr, J.
Jagger, J.
Sexton, T. M.


Batey, J.
Jenkins, A. (Pontypool)
Shinwell, E.


Burke, W. A.
Jenkins, Sir W. (Neath)
Smith, Ben (Rotherhithe)


Cooks, F. S.
Kelly, W. T.
Smith, E. (Stoke)


Cripps, Hon. Sir Stafford
Lawson, J. J.
Smith, T. (Normanton)


Daggar, G.
Leslie, J. R.
Stephen, C.


Davidson, J. J. (Maryhill)
Macdonald, G. (Ince)
Stewart, W. J. (H'ght'n-le-Sp'ng)


Dobbie, W.
McEntee, V. La T.
Taylor, R. J. (Morpeth)


Dunn, E. (Rather Valley)
MacMillan, M. (Western Isles)
Watson, W. McL.


Ede, J. C.
Mathers, G.
Windsor, W. (Hull, C.)


Edwards, A. (Middlesbrough E.)
Maxton, J.
Woods, G. S. (Finsbury)


Frankel, D.
Parkinson, J. A.



Groves, T. E.
Potts, J.
TELLERS FOR THE NOES.—




Mr. Tinker and Mr. James Griffiths.

Mr. SPEAKER then directed Mr. BEVAN to withdraw from the House, and he withdrew accordingly.

Orders of the Day — SPECIAL AREAS (AMENDMENT) BILL.

Again considered in Committee.

[Sir DENNIS HERBERT in the Chair.]

CLAUSE 4.—(Contribution by Commissioners to road and drainage expenses in special areas.)

4.16 a.m.

Mr. Tinker: I beg to move, in page 2, line 28, to leave out Sub-section (2).
I am moving this Amendment simply for the purpose of securing information. I am taken by surprise that it has been called. I have in mind parts of the Special Areas where there is low-lying land, caused by colliery workings, which has passed into the hands of the municipalities, and I want to ask the Minister of Labour whether the Commissioners have power to grant to the municipalities the means to deal with this land in their areas. Can they claim, and will the Commissioners recognise, their right to deal with this land in a similar capacity to what they would have if they were private individuals?

4.18 a.m.

Mr. Ellis Smith: I beg to support the Amendment. We desire to ask the Minister to deal with certain areas that we have in mind. We have in mind par-

ticularly the pit heaps it industrial centres, slag heaps from steelworks, and tips of other descriptions. These pit and slag heaps are eyesores. It is common to see them burning during the day and during the night, and when it is pouring with rain the rain runs off them and often runs into people's houses, carrying with it accumulations of dirt of all descriptions. It is common to see the children in these areas playing on these heaps, and we desire to draw the attention to the Minister of Labour to the matter. The hon. Member for Leigh (Mr. Tinker) has been dealing with this question for many years. He has raised it many times on the Adjournment of the House, and has obtained no satisfaction. In regard to this matter we are reinforced by the comments of the Commissioner in his Third Report on the Special Areas. If the Minister looks at pages 46 and 47, he will find that the Commissioner recommended that what we are complaining about should be dealt with. For example, he states on page 46:
Reference was made in paragraphs 68 and 69 of my Second Report to the policy adopted in regard to the clearance of sites. Many sites have been suggested to me as suitable for clearance, but it has been my policy only to approve schemes which were likely to lead directly or indirectly to the economic and industrial development of the Area. In the case of recognised or potential holiday resorts I have regarded this condition as covering the improvement of tourist facilities, and certain schemes which were likely to achieve this object have been assisted.
We realise that the Commissioners have been restricted within narrow limits. We realise that a number of these Com-


missioners have been big men, not only big in physique, but big in outlook. The very fact that they have published reports of this description has been an indication of the big outlook of a number of these Commissioners, and an indication that they themselves as individuals have desired that money should be provided to deal with this question. They have been limited because of the Special Areas Act which was passed in 1934. I want to ask hon. Members on the other side, why should these improvements be restricted to potential health resorts?

The Deputy-Chairman: The particular Amendment before that Committee deals only with agricultural land, and not with health resorts.

Mr. Smith: That is quite true, and, after what has happened we shall certainly respect your Rulings as far as we possibly can. May I ask you to be as generous as you possibly can in dealing with this matter?

The Deputy-Chairman: I have already been very generous to the hon. Member. I do not think he can possibly construe agricultural land as covering health resorts.

Mr. Smith: This is no joke to us. This is a serious question, and the hon. Member for Leigh (Mr. Tinker) deserves great credit for the way he has dealt with it. It is true that we are dealing with agricultural land, but we desire to raise this point so that we can deal, not only with agricultural land, but with other areas that we are speaking about.

The Deputy-Chairman: I am afraid that, even if this Amendment were carried, it would not have the effect that the hon. Member desires.

Mr. Smith: We were hoping that it would, anyhow. May I direct your attention to the heading of the Clause:
Contribution by Commissioners to road and drainage expenses in special areas.
Around you in those areas there are a large number of these pit heaps and slag heaps.

The Deputy-Chairman: If the hon. Member wishes to raise that, he had better raise it on the Question, "That the Clause stand part of the Bill."

Mr. Smith: If that is your Ruling, I shall raise it then, because it is most important that we should have an opportunity of putting it before the Minister.

4.26 a.m.

Sir S. Cripps: There are one or two points that I wish to put, because I do not understand how this Clause is intended to operate. The first Sub-section begins:
notwithstanding the provisions of Sub-section (5) of Section one of the principal Act,
and therefore there is the intention in the first Sub-section to do something which would otherwise be contrary to this provision. When one comes to the second Sub-section, these words are omitted. It is not that both these powers are to be notwithstanding the provision, but the powers in Sub-section (1) are to be notwithstanding while the powers in Sub-section (2) are not to be notwithstanding the provision. In other words, the provision of Sub-section (5) of Section I will still override any powers in Sub-section (2). That, I suggest, is how any court would construe this Sub-section where the second Sub-section omits words in the first Sub-section. A court would say that Parliament must have intended a different meaning to be given to the two Sub-sections in this respect, because in the one they have inserted it and in the other they have not. Had they desired those words to govern both Sub-sections, they would have put them in. I think that this must be clearly a matter of drafting. When one turns to Sub-section (5), where, on the one hand, it is going to be abrogated, various difficult questions arise. Let me just remind hon. Members of the contents of that Sub-section. I will read it, as they may not have it before them. It says:
Subject to the provisions of this subsection, the functions of the Commissioners shall not include—(a) the carrying on of any undertaking for the purpose of gain, or the provision of financial assistance to any undertaking carried on for that purpose.
That, presumably, would cover an agricultural undertaking as well as an industrial undertaking, especially in those cases where you have agriculture carried on by a company or firm and not by an individual. Then there is (b):
the provision of financial assistance by way of grant or loan to any local authority.
It proceeds:


Provided that the foregoing provisions of this sub-section shall not prevent the provision of financial assistance—(i) to any undertaking carried on with the primary object of providing means of livelihood for the persons engaged in the undertaking with a view to their establishment in a position of independence or partial independence of assistance under the Unemployment Assistance Act, 2934, or under the enactments relating to the relief of the poor.
In spite of the extremely sad stories we hear of farmers, I do not suppose that many of them would fall under the heading of that sub-section. Then there is paragraph (ii) of the proviso, which is in the following terms:
by way of grant or loan to a local authority for the purpose of contributing towards the cost of any works for which no specific grant is payable by any Government Department, or towards the provision of small holdings or allotments.…
By Sub-section (2) it is not intended to set aside the provisions of the original Sub-section (5) of Section 1 of the old Act. Perhaps the right hon. Gentleman will correct me if I am wrong, but as I understand it the Commissioners could not contribute towards the expenditure incurred by local authorities as occupiers of land, though they could as regards other owners of land. If, on the other hand, it is intended to set aside or to give this power notwithstanding what appears in the provisions of Sub-section (5), is it intended that the words "owners or occupiers of agricultural land" should cover both local authorities and individual farmers? Taking cases like sewage farms and matters of that kind, would they be covered just as agricultural land would be, or would they be excluded? In the original scheme there was, in Sub-section (6) of Section I, this paragraph:
The functions of the Commissioners shall extend to the initiation, organisation, prosecution and assistance of measures outside the areas specified in the first Schedule in so far as they are satisfied that such measures will afford employment or occupation for substantial numbers of persons from those areas.
Supposing that under Sub-section (2) an application were made to the Commissioner to contribute towards the drainage of an agricultural area outside the area by virtue of Sub-section (6) of Section of the original Act, would the right hon. Gentleman tell us whether the limiting words in this Sub-section:
agricultural land in any special area,

would exclude the Commissioners from operating the powers of Sub-section 6 of Section 1 of the original Act? It is a very important point, because there may be a number of farms in an area which is just on the border. If you get the position where the farmer on one side is able to claim this assistance it may be, while his next-door neighbour, with precisely similar land, is unable to claim this assistance, you are going to set up the most acute form of competitive subsidy which can possibly be imagined. I venture to suggest that the whole conception of the Sub-section is really unfortunate in this respect. You are dealing here in this Sub-section with what is really an agricultural problem, a problem that would be dealt with properly by watersheds and by areas of an agricultural and geographical nature, but you are attempting to deal with it within the confines of areas determined entirely by industrial circumstances. Therefore, I suggest to the right hon. Gentleman that what this should have said is that, wherever the Commissioners find they can get employment for the people in the Special Areas by assisting an agricultural drainage scheme, whether inside or outside, they then shall have the power to give that assistance. They should be acting not on the improvement of the drainage of the Special Area, but the employment of the people in the Special Area, and the critical question is, "Will that particular bit of agricultural drainage give that employment, whether the farm is inside or outside a hypothetical boundary on the map, having regard to completely different circumstances altogether?" Therefore, I should be very glad if the right hon. Gentleman could explain precisely what is the effect on this Sub-section (2) of the instruction in Sub-section (5) of the original Act, and how far Sub-section (6) of Section 1 of the old Act gives any extension to these powers under Subsection (2). I cannot see at the moment that it does.
Thirdly, I would ask whether he will consider the re-drafting, in another place if necessary, of this Section, so as to make the benefit available for the people in the Special Areas wherever the particular agricultural land happens to be, so long as the Commissioner thinks that it is easily accessible. It is very important from the point of view of the local authorities that a hard-and-fast line should not be


drawn at a particular area, but that latitude should be permitted to the Commissioner, so that he can take action at a convenient distance outside and that all these surrounding farms will be entitled to get equal benefit—if it be a benefit—from this scheme, whether they are within the limits or not.

4.37 a.m.

Mr. J. Griffiths: I join with my hon. and learned Friend the Member for East Bristol (Sir S. Cripps) in asking the right hon. Gentleman to clear up the question of whether a Commissioner, by virtue of the powers vested in him by the principal Act, can use the provisions of the Sub-section to make grants and give assistance to areas which adjoin, but are not within, Special Areas. Presumably this provision has been inserted in the new Bill because the Commissioners have drawn the attention of the right hon. Gentleman to a problem that has arisen, either in the area adjoining a Special Area or in the Areas themselves. In South Wales there is no agricultural land, if agricultural land is to be defined as land which has been cultivated, but I wonder whether the term is to be given a wider meaning so as to bring within its ambit the mountains which are a feature of Wales. We have a very grave problem in South Wales. The valleys are very narrow, the mountains are very steep, and the rivers rush down the mountain-side into these narrow valleys; and into these rivers or brooks there comes all the refuse which comes from the pits and the river bed fills up. We had a case five or six years ago where we came very near to a terrible tragedy in the Rhondda Valley, because the river overflowed and the houses, being built on the level of the river, became completely uninhabitable for a very long time. I want to ask the right hon. Gentleman whether, in interpreting this Sub-section and defining the term "agricultural land," the definition or interpretation will be widened so as to permit its being made to apply to the Rhondda Valley and the other valleys, by which the problem of drainage there can be helped. The local authorities have not the funds to do it themselves. To a very large extent, when the problem became acute, it was met by private subscription. I want the Minister to say what is the interpretation to be given. We presume that the Sub-section is to

deal with the problem of agricultural land which adjoins a Special Area. For example, the county, part of which I represent in this House, which is one of the main agricultural counties in South Wales, is not in a Special Area, but it adjoins a Special Area. Will that county of Carmarthen be able to qualify for grants under this Sub-section? And will the phrase "agricultural land" be so widely interpreted as to bring in moorland in Wales and secure a contribution towards meeting and trying to solve the drainage problem?

4.40 a.m.

Mr. Lawson: Before the right hon. Gentleman answers, I should like to ask that he will recognize that the hon. Member for Leigh (Mr. Tinker) has raised a question of very grave importance, which has required attention for a considerable time. The hon. and learned Member for East Bristol (Sir S. Cripps) has read out the relevant Section in the original Act under which the Commissioner works, and it is well known that, not only is the Section there, but in actual practice the Commissioner has been very tightly held. Indeed, the only two cases I remember in which he has had permission to do anything in this direction were two cases that were particularly mentioned by the Minister himself during one of the stages of the Bill. It is a well known fact that areas differ as far as the coal-producing areas are concerned. As a matter of fact, in Durham it is quite a common thing for a pit heap to be in an agricultural field—so much so that sometimes the plough will almost come up to the edge of the heap. If I am not mistaken, there are places in the area mentioned by the hon. Member for Leigh in which you can stand among some of these hideous heaps and see agricultural land all round. In this area the land is pocked, as it were, with these heaps. Some of these heaps are naturally thrown up at the low end of the fields. That is quite natural, because the pit is usually sunk at the lowest point, and the heap very often cumbers the lower part of the ground. To that extent the heaps certainly do interfere with the drainage, and I do know of cases where they block the drainage.
I rise to point out the importance of this matter, because I am sure that hon.


Members in all parts of the House, however much they may disagree with us about other things, will agree that the Commissioner ought to have power to deal with this kind of thing, net only from the point of view of utility, as laid down in the Act, but also from the point of view of amenities. There is really no need for the continuance of this kind of thing. In some places the heaps cumber up the land, and there are men all round who are only too eager to get to work to move them away. I do ask the right hon. Gentleman to pay close and serious attention to what my hon. Friends have asked, namely, that he should give a very broad interpretation of what agricultural land is. If he can possibly use this Sub-section for the purpose of getting rid of some of these hideous sights and making useful land, which will perform its proper work, then he should give the interpretation asked for.

4.47 a.m.

Mr. W. Roberts: In speaking of this Clause on the Second Reading of the Bill, I rather think the Minister explained to the House that the Clause would place England on the same basis with regard to land drainage grants as Scotland is at present. In Scotland there are grants for field drainage and, I think, for open drainage, and there was in England the same provision up to 1931. But as regards the suggestion that this Clause will put England on the same basis as Scotland, I would like to suggest that the Minister was a little inaccurate in his statement that what it might do is to put the Special Areas on the same basis as Scotland. I only draw attention to that fact to reinforce the plea that has been made tonight that, from the point of view of land drainage, the Special Areas are defined in a quite unsuitable way. There may or may not be a good case for giving grants of public money for land drainage—I believe there is—but I do not see any logical reason whatever for confining them only to areas that happen to have been defined in regard to the unemployment problem, and in no sense with regard to the needs for drainage. There are areas contiguous to the Special Areas which are as greatly in need of land drainage as those areas themselves. In fact, very frequently the agricultural districts surrounding industrial districts are not less in need of land

drainage. I can think of districts in the North, for instance, such as in Durham and Northumberland, in which there are enormous tracts of country contiguous to the Special Areas which could be improved, and which could give an enormous amount of employment to unskilled labour under skilled direction.
I would like to ask the Minister to explain exactly how the provisions referred to, and especially Sub-section (2), will in fact work. On the face of it, it seems a very illogical arrangement. As has been suggested already to-night, the only point of giving these grants in this particular way is to provide employment for the men in the Special Areas, and to confine them to land within the Special Areas does appear, to me at any rate, to be a quite unnecessary restriction. If you were to confine the restriction to the employment, that is to say, if the Commissioner could give grants for the drainage of land anywhere provided the men of the Special Areas got the employment, that would be a logical and reasonable arrangement. If it were possible for the Minister to reconsider this matter, I believe it would give very great satisfaction in a number of quarters. It has been brought to my notice that one branch of the National Farmers' Union, at any rate. have discussed this question somewhat fully, and there will undoubtedly be a considerable sense of injustice if the landowner or occupier on one side of a border rural district council's boundary may get substantial grants for the permanent improvement of his property, while the man on the immediately opposite side of that boundry finds himself unable to get any assistance. The Minister will say that there must be a boundary somewhere, but to choose these quite fortuitous boundaries will, I am sure, give rise to complaints. Not to limit exactly the boundaries, but to limit the extent of each particular provision by the capacity of transporting labour to the work, would be a logical and reasonable form of restriction, and, if the Minister could reconsider that, I should be very grateful.

4.52 a.m.

Mr. E. Brown: This Sub-section does not refer to schemes of land reclamation, such as the hon. Member for Chester-le-Street (Mr. Lawson) has in mind. The Commissioner has power under the original Act for that purpose. This refers to field drainage. It is really a


Clause to do a very small thing—[AN HON. MEMBER: "An important thing"]—it does not follow that a small thing is not important.

Mr. Lawson: The Commissioner only has power as regards land reclamation by permission of the Ministry.

Mr. Brown: That is the general power of the Act. The Commissioner has power, and we would not stand in his way if he attaches importance to the scheme, if it is not, of course, covered by a grant from some other Department. Perhaps I may explain how it arose. It arose through a visit paid by the Commissioner—not the present Commissioner—to the Cumberland area. It did not arise in the way in which the hon. Member for North Cumberland (Mr. Roberts) put it. It arose really because, when field drainage is planned for economic development, in Scotland there is no obstacle in the way of a grant being given by the Scottish Department of Agriculture. There are no catchment boards for land drainage in Scotland. In England it is otherwise. The great bulk of land drainage in this country is done through highly organised catchment boards covering large areas. In Scotland it is possible for the Commissioner under the original Act to give grants for schemes which are not specifically undertaken by local authorities. The Commissioner is not able to give a grant for land drainage if the land is in the occupation of private owners. This arose only on the Cumberland side of the Border, because, the law being different, those who desired economic development in the Special Area in Cumberland in terms of field drainage found they could not get what their Scottish neighbours were able to get. Attention was called to this by the Commissioner, and he represented to the Government that he would like to have power to do on the Cumberland side of the Border what he has done on the Scottish side, namely, to assist schemes of field drainage, of which there are a small number. The amount in Scotland, as I think I informed the House on the Resolution, is not a large amount—about £8,000 a year—not a large sum at all. It was for that reason, and not for the reason of employment, that the Commissioner asked for power to do this. That is the sole purpose of Subsection (2).
Let me now answer some of the questions that have been put. The point was raised as to whether the Commissioner could do this both inside and outside a Special Area under Sub-section (6) of Section 1 of the original Act. The answer is that I am advised that, if he thinks it necessary, to complete a scheme of drainage, to go outside the area, then he has power under Section 1 (6). I am equally advised that, if work is to be done outside the special area in terms of employment, it could not so be done. I understand that the difference in phraseology referred to by the hon. and learned Member for East Bristol (Sir S. Cripps) arises from the fact that it is not desired to give any general power to assist local authorities in that matter, and that is why the present Sub-section was drafted in the present way, because it was not intended to give power to assist local authorities. Sub-section (2) could not refer generally to Sub-section (5) of Section 1 of the original Act, but had to limit itself to saying—
notwithstanding that the land is occupied for gain"—
which is precisely the point put to the Government by the Commissioner in investigating this position in Cumberland.
I was asked by the hon. Member for Llanelly (Mr. James Griffiths) about the definition of the term "agricultural land." If he will turn to that interpretation Clause he will find that it is defined as having the same meaning as it has for the purpose of Part IV of the Land Drainage Act, 1930, and I understand, if I may give him the words, that it is a very wide definition. It reads as follows:
The expression 'agricultural land' means any land used as arable, meadow or pasture ground only, land used for a plantation or a wood or for the growth of saleable underwood, land exceeding one-quarter of an acre used for the purpose of poultry farming, market gardens, nursery grounds, orchards or allotments, including allotment gardens within the meaning of the Allotments Act, 1922, but does not include land occupied together with a house as a park, gardens (other than as aforesaid) pleasure grounds, or land kept or preserved mainly or exclusively for purposes of sport or recreation, or land used as a racecourse.
That is the definition, and it is a wide definition, of agricultural land. If Members will look at the definition of field drainage, they will find that it includes moorland. Clearance of sites is not a problem in this Sub-section. I cannot


think that the Commissioner would wish to deprive Cumberland of this useful alteration of the law to enable him to do these things for the economic development of an area which may be held back because there was not sufficient field drainage.

4.58 a.m.

Sir S. Cripps: May I ask one thing? I think the Minister must have misunderstood what he has been told with reference to Sub-section (6). I am quite certain that, if he will read it again, he will see that he must have misunderstood it. Sub-section (6) lays down the conditions under which the functions of the Commissioner can extend to the organisation of assistance of measures outside the areas specified, in so far as he is satisfied that such measures will afford employment or occupation for substantial numbers of persons from those areas. He cannot deal with a little bit which is outside and not inside. That is not the criterion. It does not say that where a scheme is being carried out, and there is a small portion outside the area, the Commissioner may deal with that small portion outside the area. It is nothing of the sort. It says that, where the Commissioner says that a portion outside the area will give substantial employment inside the area, he can do that job outside the area. That is very important on this point, and I think it is most unfortunate that we have not got a Law Officer to deal with these various legal points. There is, I know, an hon. and learned Gentleman on the back benches, and he is doing his best, although he disagrees with other hon. Gentlemen. I am sure the right hon. Gentleman will say it is not right to say that Sub-section (6) allows you to deal with small areas left over outside. I would ask him to put this matter specifically to the Law Officers and if, as I understand, what he has been instructed is not in accordance with the law, will he see that an alteration is made in Clause 2.

Mr. E. Brown: Really the misunderstanding is not mine. I had informed myself regarding this particular matter. There was an Amendment put down, which it has not been possible to discuss. When I went into the matter on that Amendment I found that what I have told the House was the accurate legal explana-

tion. Clause 1 Sub-section (6) of the original Act is the general provision. This provision is not a general but a specific provision.

5.2 a.m.

Mr. Davidson: I was very pleased with the explanation of the right hon. Gentleman as to the non-interference with the Scottish land drainage law. I have been very anxious regarding this Clause and I have re-read it very carefully. Without casting aspersions on any person, I was very glad that the discussion of this Clause coincided with your return to the Chair. The Minister in describing this as a small matter has missed entirely the complete looseness of the phrasing of the Clause. As a Scottish member I feel that, if this Clause is to operate on this side of the Border, then we would prefer to have this Clause. It is said that the Commissioners can subscribe towards any expenses incurred by owners or occupiers of agricultural land in any Special Area. We may have agriculturists who use their land for their own particular benefit and the expenses involved may be more than may reasonably be expected. This is very important for Scottish agriculturists and I hope the Secretary for Scotland may read my speech. If the Minister of Labour is becoming generous, we in Scotland should participate in that long sought generosity. I want to know what "any expenses" means. If an agriculturist in a Special Area brings into being a land drainage scheme and he gives his labour free beer and free meals, does that come in? We must be careful to see that the national funds are not wastefully used.
There is another point which seems to give those who participate in these schemes more freedom than has ever been given to industrialists or the working-class people in this country. It says that any expense will be granted in connection with the execution of works of field drainage. If a land drainage scheme is started the Commissioners have no guarantee that it will be executed. It is also said that "notwithstanding the land is occupied for the purpose of gain." I think we can agree that in an earlier Clause the Minister did make some attempt to see that the profits in industries, of factories, would be reasonable, but there is no indication in this Clause that the Minister, or Com-


missioners, have to ascertain whether it is going to be of a reasonable kind or "may be as near". I admit that I am puzzled. I am chary to believe that the Minister of Labour has departed from his very careful, niggardly and tight policy. If these words mean what I have indicated, I am asking the Minister of Labour to see that in his new burst of generosity he includes Scotland.

5.8 a.m.

Mr. Ritson: The Minister has mentioned another thing—that it is for economical development. Does the Minister not know that right across the Border, right from the Solway to beyond the borders of Northumberland, it would be economical development to drain the land by giving grants to local authorities or anyone else? There are thousands of tons of coal lost in that area. It was so wickedly undrained that we had men drowned in a colliery near where I was brought up. There are thousands of acres of land to drain, drainage would be economical. The question of drainage is more important than the Minister thinks. There is such a thing as deep arterial drainage, which must be carried beyond the Special Areas or it would not be completed. These works do find work for men and, so far as Northumberland is concerned, we can point to work you can carry out for economical development in that area. We did on one occasion move men right away from West Cumberland down to the Northumberland border and the men were glad of the work and it was an economic thing. I can assure the Minister it would be an economic development to carry out field drainage of any kind, but we would prefer deeper drainage first of all and sub-soil drainage later. You may find arterial drainage carried down to the Border and if there is no provision there then that would not be an economic development. I hope the Minister will look again into this matter.

5.11 a.m.

Mr. Leslie: I understood that this Bill was to provide work for the unemployed. The Minister of Labour tells us that this drainage scheme is not to provide work for the unemployed but merely to help certain people to have their fields drained. If they do want to help the unemployed there is plenty of work for the unemployed in draining land. You have only

to travel the country from one end to the other and there are miles and miles under water. I believe there was a Commission on Land Drainage and it was computed by them that by having a proper system of land drainage in this country it would mean work being found for 50,000 workers. The last speaker mentioned the position in Durham. There is plenty of land in Durham that requires draining and we know how pits are flooded. In one pit re-opened recently they can work only the top seam, as the rest is flooded. The Minister mentioned that in England there are catchment boards and I wonder what they are doing when we have had the flooding we have heard of recently.

The Deputy-Chairman: I must tell the hon. Member that this only applies to the Special Areas.

Mr. Leslie: Supposing it applies only to the Special Areas as the previous speaker said, the place to look for is where the flow enters. I hope the Minister will take that point into consideration, and with the help of the Minister of Agriculture who has been taking such a keen interest in the Debate, that something will be done in this direction.

5.14 a.m.

Mr. Sexton: Several speakers have referred to the moorlands on the Pennine Hills. I happen to live there and I know there are thousands of acres that could be valuable agricultural land if it could be drained. I understand from the Commissioner's Third Report that schemes have been submitted to the Minister of Agriculture. My point is that the Commissioner could not assist schemes that come under another Minister, and what I want to know is, does this Sub-section (2) of the Clause enable the Commissioner to pay to owners, including local authorities, money towards their field drainage and, if so, is that contribution limited or can the whole cost be borne by the Commissioner. I find on referring to the Third Report that the Commissioner says the Durham schemes have been examined and recommended for grant to the Minister of Agriculture—a grant of 75 per cent. The County Council represented that a larger grant should be made and the matter is still under consideration. In the meantime the work on these schemes cannot be commenced and we have in South West Durham the very


type of man for this work. We cannot afford to pay 25 per cent. of the cost and I would like an assurance that something can be done under this Clause to eliminate the anomalies which have prevented field drainage being done in the past.

5.17 a.m.

Mr. E. Dunn: I listened with a great deal of interest to the Minister giving his explanation to the House upon Sub-section (2) of this Clause, and I was surprised to hear him limit the effect of this Clause. I was under the impression that when we debated the Financial Resolution that the Clause would certainly have a wider interpretation than the Minister has given to it this morning. He will remember quite well that on that occasion I raised the question of land drainage as rather a major issue, and I pointed out how many thousands of acres of land were definitely waterlogged in the Midlands, in Yorkshire, and indeed in my own constituency, and when I heard the Minister give his interpretation it struck me very forcibly that the Clause had no wider interpretation than merely an application to individual farmers. I appreciate the point very much that individual farmers do stand to benefit under this Clause, but this Bill is not intended solely to help individual farmers or the agricultural industry. The Clause, as I understood it, was to assist unemployed people within the areas where land drainage is necessary.
Do I understand the Minister to say that the provision of this Sub-section would not apply to a local authority who were involved in the question of land drainage either for building sites or for development of any particular form they have in mind? The point is that a considerable number of building sites have been purchased and there is water coming from the uplands and at the moment is actually preventing the building of houses to relieve overcrowding. I appreciate that if this site had not been purchased by the local authority under this Clause the farmer would have been entitled to receive considerable financial aid. That is the interpretation, as I understand it. Do I, therefore, take it that because the local authority has purchased the land within the last twelve months and the site in certain sections is waterlogged, the local authority are not entitled to the

benefit of this Clause? If that is the interpretation, then it seems to me that instead of this Clause being of any benefit for the men who are out of work that men who are unemployed at the present time will actually be kept out of work. I know that I have to be very careful under line 3 of the Sub-section "land in any Special Area."

Mr. T. Smith: That rules you out.

Mr. Dunn: I do not know whether the hon. Member is entitled to give a Ruling which would be expected from the Chair. Surely the point is that the whole inference that one can draw from Clause 4 and other Clauses in the Bill is surely making a provision for big tracts of country where unemployment is prevailing equally as badly as it is in the Special Areas themselves. I have pointed out on previous occasions that we have parts of Yorkshire which are equally as badly affected by unemployment as any one of these areas which are referred to as Special Areas. Therefore, it seems to me that land drainage is a vital problem—indeed I put it as high as this that land drainage is surely wide enough to be interpreted as part of the defence of the country at the present time—and surely that problem of growing food and building houses is something which cannot be ruled out even in a Subsection of this kind. I hope that the Minister will put an interpretation that the areas to which I have called attention are areas which are entitled to benefit from this Sub-section. If not, one can only conclude that the spirit of Sub-section (2) is not in general harmony with that intention of the Bill. There are thousands of acres of land within the area I represent definitely waterlogged for the last quarter of a century and badly needing help of this kind. If the local authorities are not going to have any benefit under this Clause it seems to me that no individual agriculturist or farmer can possibly undertake a huge work of this kind. Surely in making this second appeal to the Minister we may ask that the interpretation of this Clause should be that it is to apply not merely to Special Areas but to big tracts of country which are waterlogged at the present time. Secondly, if the local authorities are called upon to undertake that work, they should receive the same benefit as an individual farmer may receive who is occupying the land for purposes of gain.

5.26 a.m.

Mr. Ede: I regret very much that the hon. and learned Member for West Derby (Mr. Fyfe) is not now in the House, and has failed to persevere in his efforts to catch the eye of the Chair. A long and complicated technical legal argument was developed by the hon. and learned Member for East Bristol (Sir S. Cripps) to which no adequate reply by anyone skilled in the law has yet been given. The Minister did his little best with the subject, but I gather that he did not convince the hon. and learned Member for East Bristol, and I am not sure that he carried with him on this occasion the hon. and learned Member for West Derby. I notice that there are many Ministers whose names are on the back of the Bill, and they might have been of help to us. I see that the hon. and learned Member for West Derby has now returned, and I hope that before the discussion on this Amendment ends we shall have the benefit of his opinion on the points raised by the hon. and learned Member for East Bristol. I notice that the hon. and learned Member for West Derby paid him the compliment of taking copious notes while he was speaking, and I am quite sure that in the absence of die Law Officers of the Crown, and in the possibility that there may be a vacancy among the Law Officers of the Crown in the near future, it might be as well for the hon. and learned Gentleman to assist the Committee. The Attorney-General's name is on the back of the Bill, and I understand that he is in town to-night, if not in the House.

Sir Edward Campbell: But is he in town this morning?

Mr. Ede: I am assured that he is and that he has been seen, and I think it is not treating the Committee with respect that a very complicated matter of this kind should be left to the lay experience of the Minister of Labour to explain to the House. I want to suggest to him that if he retains both these Sub-sections—

Lieut.-Colonel Sandeman Allen: Since the hon. Member wants all this assistance, where are the four Socialist Members who have been going around in the Special Areas specially studying this problem?

Mr. Ede: The hon. Gentleman, from his freshness, quite obviously has only just come into the House.

Lieut.-Colonel Sandeman Allen: I have been here all night.

Mr. Ede: I do not think that my hon. Friend the Member for Bishop Auckland (Mr. Dalton) would have been of very great assistance on this point raised by the hon. and learned Member for East Bristol (Sir S. Cripps). I am grateful to him for assisting me to get a little nearer the time when my train will be leaving, but I suggest his intervention is hardly relevant. I suggest to the right hon. Gentleman that really this Clause 4 should be made into two Clauses. There is no real connection between Sub-section (2) and Sub-section (1). That would have avoided the point raised by the hon. and learned Member for East Bristol with regard to the different opening phraseology of the two Sub-sections. It is a great pity that when dealing with two subjects the Government did not put them into two separate Clauses. I am well aware that it will only require one Closure Motion to dispose of the two Sub-sections, whereas if they had been made into two Clauses, quite obviously the Chief Whip would have had to move the Closure on two occasions in order to get the two Clauses.
We are beginning to understand that the legislation of the Government is not decided by any conditions of high policy or by Cabinet decisions, but only by the convenience of the Patronage Secretary, which determines not merely the subjects but the manner in which they are incorporated in the Bills presented to us. I think the Chief Whip can hardly feel pleased with his performance to-night, and I suggest that as a gesture of good will towards the Committee he should now agree to advise the Minister of Labour to make Clause 4 as it stands into two Clauses and in that way do something to show that he does recognise that the Government, and especially the Chief Whip, owe something to the House and to the Committee.

5.32 a.m.

Mr. T. Smith: I am not going to discuss field drainage in its broad sense, but my hon. Friends have had very long experience of land drainage in connection with catchment boards and what I want


to ask is whether under this Sub-section grants made by the Commissioner will be limited to work within a special area, or would it be possible, seeing that the subject of the Clauses under this Bill deal with areas which are not Special Areas, for grants to be made for similar work elsewhere? I would like the Minister to give a definite assurance on that point because it may remove misapprehensions.

5.33 a.m.

Mr. Barr: I would like to emphasise what fell from the hon. Member for Maryhill (Mr. Davidson) in regard to the wide terms in which this Clause is drafted. It seems to be very wide and implies that grants might be given for the equipment which may be necessary in order to meet needs outside the Special Areas. I wish to emphasise that we desire an assurance that Scotland will get the same generous treatment under this Clause. We have a special land drainage Act of our own, and I would call attention to the fact that the Commissioner for the Special Areas in Scotland in both his reports—that issued for the period July to September, 1935, and in his final report—calls attention to the need of land development and particularly of drainage in what is a scheduled area in Lanarkshire itself—Carstairs and that portion of Lanarkshire. In the final report the Commissioner makes a special reference to the work of reclamation of waste land, and experiments in the more intensive use of land. He expresses the hope that if this experiment should be successful, plans relating to Scotland as a whole may be formulated for the largest possible programme of land reclamation and development.
I need refer only to one more of his recommendations, namely that in regard to arterial drainage schemes, in connection with which he says that following the extension, upon his recommendation, of the Land Drainage (Scotland) Act, r930, the Department of Agriculture for Scotland had completed plans and initiated a scheme designed to check flooding in the River Clyde in the Carstairs district of Lanarkshire. In and around my own area there are very large parts of the country that are subject to this flooding and the whole is a distressed area, and it seems to me that you have a field there for the fullest generosity in accordance with this Clause in regard to the

Special Areas in Scotland. I feel strongly for my own constituency and ether parts of Lanarkshire in this respect, and I desire an assurance that these schemes will be carried forward and that these grants will be generously given to Scotland as a whole.

5.38 a.m.

Mr. Malcolm MacMillan: I think it is rather disappointing, to those of us who expected something more out of this Bill which deals with such important subjects, to find ourselves reduced to quibbling and a legal technicality. The Minister himself, instead of advertising his Bill in a big way and making it look bigger than it was, as advertisers do, has deliberately gone out of his way to minimise it and make it look as small and ridiculous as possible. I want to concentrate upon the words of this Subsection. If this Bill is going to be of any immediate value, surely it should concentrate on immediate and substantial employment for as many people as possible? Yet the Minister himself has concentrated more on the insignificant implication of the wording and of what was promised, instead of concentrating on the amount of labour which could be given under the Sub-section. Surely it is a very poor confession for the Minister to make to this Committee that this Clause is intended and is worded in such a way as to mean that it would give the smallest amount of work possible on the smallest schemes imaginable. Under this Clause we could have any amount of employment, having regard to the tremendous tracts of undeveloped land for people from or within the Special Areas on land drainage and land development. It is all part of the same problem of agricultural production, which is the problem of the land, the most fundamental and the most important of all.
I know it will be out of order now, but I should like to register a protest against the neglect of the Highlands and Islands of Scotland as a Special Area. I am very sorry we are not given wider scope to discuss the rural district areas, because after all we can limp along for a little while with industrial depressed areas but we cannot live for any length of time with agriculture as a depressed area. Where rural and industrial areas are situated side by side the prosperity of the one is the


measure of prosperity of the other. The agricultural people find their market in the industrial centres, in the demand for their produce. When industrial districts are in poverty the market is smaller and the demand is less for agricultural produce. When poverty falls in the agricultural and rural districts there is a drift into the industrial areas, which magnifies and increases the problem of the industrial areas. If, instead of minimising and reducing this Clause and Subsection almost to ridicule, the Minister had magnified it and dealt with it in a big way, he might have helped to provide employment for many of those who have suffered from unemployment in the industrial depressed areas as well as other areas on work of first-rate national im-

portance in agriculture and land drainage. We do ask him now, although he does not listen, to interpret it as generously as possible.

5.43 a.m.

Mr. Shinwell: I only wish to say that as this Sub-section is quite irrelevant to the Clause itself, and as it appears that another subsidy is intended to be paid to members of the farming community which, however advantageous it may be to them personally can have no special bearing on the special areas, we propose to divide against the Sub-section.

Question put, "That the words proposed to be left out stand part of the Clause".

The Committee divided. Ayes, 121; Noes, 45.

Division No. 155.]
AYES.
[5.44 a.m.


Acland, R. T. D. (Barnstaple)
George, Megan Lloyd (Anglesey)
Petherick, M.


Agnew, Lieut.-Comdr. P. G.
Goldie, N. B.
Plugge, Capt. L. F.


Albery, Sir Irving
Graham, Captain A. C. (Wirral)
Procter, Major H. A.


Allen, U.-Col. J. Sandeman (B'kn'hd)
Grant-Ferris, R.
Raikes, H. V. A. M.


Aske, Sir R. W.
Griffith, F. Kingsley (M'ddl'sbro, W.)
Rathbone, J. R. (Bodmin)


Assheton, R.
Grimston, R. V.
Reid, W. Allan (Derby)


Balfour, Capt. H. H. (Isle of Thanet)
Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)
Roberts, W. (Cumberland, N.)


Barclay-Harvey, Sir C. M.
Guinness, T. L. E. B.
Robinson, J. R. (Blackpool)


Beaumont, Hon. R. E. B. (Portsm'h)
Hannah, I. C.
Ropner, Colonel L.


Blindell, Sir J.
Hannon, Sir P. J. H.
Ross Taylor, w. (Woodbridge)


Boulton, W. W.
Harbord, A.
Salt, E. W.


Bower, Comdr. R. T.
Heilgers, Captain F. F. A.
Samuel, M. R. A.


Bowyer, Capt. Sir G. E. W.
Hepburn, P. G. T. Buchan-
Sanderson, Sir F. B.


Braithwaite, Major A. N.
Herbert, Major J. A. (Monmouth)
Scott, Lord William


Brass, Sir W.
Holmes, J. S.
Seely, Sir H. M.


Brown, Rt. Hon. E. (Leith)
Hope, Captain Hon. A. O. J.
Shaw, Major P. S. (Wavertree)


Burghley, Lord
Hopkinson, A.
Smith, Bracewell (Dulwich)


Campbell, Sir E. T.
Hudson, Capt. A. U. M. (Hack., N.)
Southby, Commander A. R. J.


Cartland, J. R. H.
James, Wing-Commander A. W. H.
Stourton, Major Hon. J. J.


Cary, R. A.
Joel, D. J. B.
Strauss, E A. (Southwark, N.)


Castlereagh, Viscount
Kerr, J. Graham (Scottish Univs.)
Strickland, Captain W. F.


Channon, H.
Law, R. K. (Hull, S.W.)
Stuart, Hon. J. (Moray and Nairn)


Clarke, Lt.-Col. R. S. (E. Grinstead)
Leckie, J. A.
Sutclifle, H.


Cobb, Captain E. C. (Preston)
Leighton, Major B. E. P.
Taylor, Vice-Adm. E. A. (Padd., S.)


Colville, Lt.-Col. Rt. Hon. D. J.
Lennox-Boyd, A. T. L.
Thomas, J. P. L.


Courtauld, Major J. S.
Liddall, W. S.
Touche, G. C.


Crookshank, Capt. H. F. C.
Loftus, P. C.
Tree, A. R. L. F.


Crowder, J. F. E.
Mabane, W. (Huddersfield)
Tufnell, Lieut.-Commander R. L.


Davidson, Rt. Hon. Sir J. C. C.
McCorquodale, M. S.
Turton, R. H.


Davies, Major Sir G. F. (Yeovil)
MacDonald, Rt. Hon. M. (Ross)
Wakefield, W. W.


Dawson, Sir P.
McKie, J. H.
Walker-Smith, Sir J.


Doland, G. F.
Macmillan, H. (Stockton-on-Tees)
Ward, Lieut.-Col. Sir A. L. (Hull)


Dorman-Smith, Major R. H.
Macnamara, Capt. J. R. J.
Ward, Irene M. B. (Wallsend)


Duncan, J. A. L.
Margesson, Capt. Rt. Hon. H. D. R.
Watt, G. S. H.


Eckersley, P. T.
Mayhew, Lt.-Col. J.
Williams, H. G. (Croydon, S.)


Elliot, Rt. Hon. W. E.
Mellor, Sir J. S. P. (Tamworth)
Wise, A. R.


Emery, J. F.
Mills, Major J. D. (New Forest)
Wragg, H.


Evans, Capt. A. (Cardiff) S.)
Morris-Jones, Sir Henry



Everard, W. L.
Nicolson, Hon. H. G.
TELLERS FOR THE AYES.—


Findlay, Sir E.
Patrick, C. M.
Lieut.-Colonel Llewellin and Captain Waterhouse.


Fyfe, D. P. M.
Peters, Dr. S. J.





NOES.


Adams, D. (Consett)
Dunn, E. (Rother Valley)
Jenkins, Sir W. (Neath)


Adamson, W. M.
Ede, J. C.
Kelly, W. T.


Barr, J,
Edwards, A. (Middlesbrough E.)
Lawson, J. J.


Batey, J.
Edwards, Sir C. (Bedwellty)
Leslie, J. R.


Burke, W. A.
Frankel, D.
Macdonald, G, (Ince)


Cripps, Hon. Sir Stafford
Griffiths, J. (Llanelly)
McEntee, V. La T.


Daggar, G.
Hall, J. H. (Whitechapel)
MacMillan, M. (Western Isles)


Dalton, H.
Henderson, J. (Ardwick)
Maxton, J.


Davidson, J. J. (Maryhill)
Jagger, J.
Parkinson, J. A.


Dobbie, W.
Jenkins, A. (Pontypool)
Potts, J.




Price, M. P.
Smith, E. (Stoke)
Watson, W. McL.


Pritt, D. N.
Smith, T. (Normanton)
Windsor, W. (Hull, C.)


Ritson, J.
Stephen, C.
Woods, G. S. (Finsbury)


Sextan, T. M.
Stewart, W. J. (H'ght'n-le-Sp'ng)



Shinwell, E.
Taylor, R. J. (Morpeth)
TELLERS FOR THE NOES.—


Smith, Ben (Rotherhithe)
Tinker, J. J.
Mr. Mathers and Mr. Groves.

Motion made and Question proposed, "That the Clause stand part of the Bill."

5.55 a.m.

Mr. Lawson: This Clause enables the Commissioner to make grants towards the making good of streets in any of these areas. I want the Minister to take serious note of the points which have been put concerning the first part of this Clause. I suppose that the Government, when they put in this Sub-section, in reality thought they were rendering a service to the Special Areas. The Minister assents, and to the average person outside the areas it would appear as though the Government were really making a contribution towards the problem, but I think the right hon. Gentleman could not have been under a delusion. I do not think anyone who knows what the facts are in these areas would think for a moment that this was a vital contribution. It may be possible to give a grant to a local authority and this is really making the position worse. You have local authorities with very heavy burdens at the present time. You have Merthyr. Even though they got a grant of five shillings through the block grant, I believe. That still leaves the rates at twenty shillings in the pound. Durham has as a matter of fact a rate of sixteen shillings. If the Commissioners were offering some parts of Wales a 75 per cent. grant for the making up of streets it would not be of use to those areas. It would be the same in Scotland and various other areas. I think the Commissioner offered a grant of something like 75 per cent.—or it may have been 80 per cent.—towards the new hospital to be built in Durham. The County Council pointed out that it would cost £30,000 a year in maintenance to run that hospital. What happens when the Commissioner gives 75 per cent. or 80 per cent. is in actual fact that instead of helping it only adds to the localities' financial obligations.
This Clause says that the Commissioner may make a grant towards any expenses incurred by the local authority. One of the things we have not had answered on this subject is whether it is possible for

the Commissioner to make a 100 per cent. grant. If the Minister says "Yes" we would ask him whether it is contemplated in the really serious condition in some of the areas that the Commissioner is likely to make such a grant, because that is extremely necessary. It has been pointed out that in some of the areas the streets are in bad condition. It is a well known fact that the local authorities have not been able to carry out their duties. It is not only in respect of streets, but in almost every branch of their work that the local authorities have failed because they could not do the work on account of the shortage of finance. This Clause really looks important, but in fact it is simply window-dressing. It is part of the attempt by the Government to make this Bill look definitely more important than it is and to give it the appearance of doing something it does not do.
I would ask the Minister to make it quite clear what is the intention behind this Clause. Is it the intention that the Commissioner should make full 100 per cent. grants, and will he have complete freedom in that matter? As a matter of fact that second Sub-section is of far more value to the landlord than the first one is to the local authority. It allows grants to the landlord for the purpose of drainage, which may be of very great value to him. So we say that this particular Clause is not really of as much value as it looks, and so far as I am concerned I am not particular whether it is in the Bill or not. I want to make that quite clear to Members on the other side of the House. I think the milk will be about due now, but still we make no apology for keeping the Commitee up on this matter, because it is the last time we shall get an opportunity of discussing it. This Clause can work if the Minister can give a guarantee that the Commissioner will give 100 per cent., but I can assure the Committee that it is of no value if he gives us anything less than that.

6.2 a.m.

Mr. W. Joseph Stewart: After listening to the Debate on this Clause to my mind the amount of money allocated for this


purpose is meagre and totally inadequate. As stated in the memorandum accompanying the Financial Resolution, there is an amount of £250,000 for this particular class of work. In the area in which I live we have a local authority who are desirous of getting on with public street works, and who have made application to the Area Commissioner, asking him if he was prepared to help in this particular direction so that the authority would be able to get on with work long overdue. To their surprise, although it had been said that the Commissioners were willing to help in public street works, they were told that, as far as frontagers were concerned, as an authority they had to apply the means test. If a local authority are going to be tied up with regulations suggesting that before they can get on with the works that are so necessary they have to apply a means test to the frontagers concerned I am afraid, there will not be very much work done. Following that up, I would like to ask the Minister whether, if local authorities are desirous of getting on with this work, the amount of money set out in this memorandum, namely £250,000, is going to be allocated to this particular class of work. As I have already said, local authorities are deeply concerned over this matter and they are desirous of having a clear declaration from the Minister so that they can find out how far they can go in making up public streets. If their hands are going to be tied I am afraid there will not be much work done in this particular direction.

6.6 a.m.

Mr. Jenkins: If I understand the Minister correctly it seems that this Clause is only to make provision for certain payments to be made to urban district councils and some borough councils in respect of roads other than roads which carry through traffic. It is characteristic of all the legislation we have had on the Special Areas that it is merely pettifogging and does not help very much. It is indeed an open and frank refusal on the part of the Government to accept one of the main recommendations made to them. If this had been done we should have relieved local authorities of many of the difficulties with which they have been confronted. The hon. Member for Chester-le-Street (Mr. Lawson) has told

the Committee of his experience in Durham, where the Commissioner made an offer of approximately 85 per cent. for the purpose of building a hospital. He offered the grant and then the local authority was faced with the maintenance charge, and the charge was £35,000 a year. The service was needed, and the Commissioner recognised it, but the local authority could not accept the offer because they could not bear the administration cost. That is not the experience of Durham only; it is the experience of a number of other local authorities. The Glamorgan County Council accepted a grant in respect of the building of a hospital. I believe they got the 100 per cent. grant, but to cover the costs of administration they had to levy a charge equal to a sixpenny rate.
This Bill only prolongs the agony in these areas, and in the long run it will make the problem of dealing with the Special Areas much more difficult for the Government. Some day or other a Government will face the real problem of the Special Areas and deal with it in a comprehensive and effective manner. This Bill is only going part of the way. Reference has been made to Merthyr Tydvil. It is true that under the revision of the block grant formula the town receives relief amounting to five shillings in the pound. I notice that the town has only been able to pass on to the ratepayers three shillings out of that five shillings and the rest will be absorbed in the cost of ordinary administration. Despite this relief the rates in the pound will still approximate to 25 shillings. I think it is the highest rate in this country at the present time. This five shillings rating relief does not solve the rating problem of Merthyr, nor will this Clause solve that problem. This Clause goes part of the way, and that is my complaint against the Government in this Bill. This Clause is characteristic of the way in which they are dealing with the Special Areas.
A much more effective thing would be for the Commissioner to have power to take over all these excess burdens which arise and to bring the rates of Merthyr down to a level which conforms to the average of this country. If that were done we should not have reluctance on the part of some industrialists to go to Merthyr because rates are high. It would remove that issue. There is a


number of suitable sites for industries, but we have beep told that industrialists do not go to Merthyr because rates are high. Why not take the necessary action to make those rates conform to the average of the country? Then we should give Merthyr a fair and equal opportunity with other districts to meet their problem. The Minister himself must feel very dissatisfied with measures of this kind. No Minister could bring a Clause of this kind before this Committee and at the same time feel convinced that it will do more than just touch the fringe of the problem. Time after time we discuss the Special Areas problem step by step, but still leaving the problem almost untouched. I ask the Minister and the Government to face this problem in a very different way. In years to come when we look back on the treatment of the Special Areas and see the slow, tardy action of the Government in dealing with them we shall recognise that we have wasted time and energy and, what is much worse, caused a lot of human suffering by a refusal to take effective action. Therefore, I want it to be placed on record that this Clause, doing so little, will not go very far towards solving the problem of the Special Areas.

6.15 a.m.

Mr. E. Smith: I appeal to the Minister to consider the issues I want to raise. In Lancashire, South Wales and several other areas more and more pits are having to contend with flooding. The local authorities, the Miners' Federation and other organisations have done all they possibly can with a view to avoiding the effects of that flooding. Lancashire in particular is suffering from it. Mine after mine is having to close down, although experts say that if only attention had been paid to this question of flooding those pits would have been saved, mining would still have been taking place there, thousands of men would still have been employed and colliery proprietors would have been receiving a return on their money. I ask the Minister to try to get some form of co-operation between the owners and the Government in order to prevent flooding taking place to this extent. On page 3 of the Report I find that the Commissioner for the Special Areas made use of the following words under Clause 8:

Grants continue to be made to local authorities for sanitary and water services where such can be certified by the Minister of Health as being urgently necessary on grounds of public health.
Therefore, I want to ask the Minister to consider what I am going to lay before him on the basis of what appears in the Commissioner's Report. I want to draw the attention of the Committee as a whole, and of the Minister in particular, to the long standing grievances in certain areas, legitimate and reasonable grievances, over slag heaps. Going about the country one cannot help being struck by these eyesores.

The Deputy-Chairman: I really cannot see how this Clause, whether it stands part of the Bill or not, can affect the point which the hon. Member is trying to raise.

Mr. E. Smith: It states it under the principal Act the Minister may make a grant for any expense incurred by a local authority in any Special Area in the repair or improvement of streets. I am trying to show that the local authorities cannot deal with these streets and roads because of the menace of pits and slag-heaps. Often the streets cannot be used by vehicular traffic because of the dirt which has been brought down by the rain forming a barrier across them. Under this Clause it would be possible for the Minister to deal with these complaints. I have already pointed out that there are eye-sores which are observed by people as they travel past by train. During the war some of these were dealt with. In one or two areas German prisoners were put to work on these pit-tips. At a place called Fenton, with the co-operation of the local authorities good soil was put on the tips and beautiful roads were constructed. What was a pit-tip is now a beautiful park, nicely laid out in Spring, Summer and Autumn, with suitable vegetation. It is the admiration of everyone who visits that centre, and is no longer an eye-sore.
What could be done during the war could be done in peace time, particularly when the Minister and the Government are trying to assist the local authorities within the limits of this Bill, bad as it is. We want to get the maximum amount of good out of it, and I appeal to the Minister to put the broadest possible interpretation on this Clause in order to assist


in this direction. A certain amount of work has already been done. On page 46 of the Report the Commissioner points out that in South Shields they have cleared a number of derelict sites at a cost of, approximately £80,000. I have had the privilege of visiting that place and it is a credit to everyone who has had anything to do with it, to the local authorities and to the Commissioner himself.

The Deputy-Chairman: I do not see what that has to do with this Clause. The hon. Member was addressing himself to pit-tips and clearing them away in the interests of getting cleaner streets, but now he seems to have gone right away from streets altogether.

Mr. Lawson: One of the reasons for a site being cleared was that it could be cleared for roads and streets, and would not that come within the rules of Order?

The Deputy-Chairman: As long as the hon. Member keeps his argument to streets he is in Order.

Mr. Smith: I can recognise your difficulty, Captain Bourne, and I have no complaint to make. You intervened when I was just going to point out that not only have they cleared these areas but they have also built a beautiful promenade. I saw photographs the other day in a publication called "Town Planning." They showed what could be done if only the Minister and the area would cooperate to carry out such works and follow this fine example. It was because of this that I am drawing the Minister's attention to what appears in the Commissioners' Report.
The Commissioner also deals with the clearance of derelict sites in other areas, and points out that he had been restricted within very narrow limits. It is indicated by his phraseology that he desires to go further, but he is limited by the narrow interpretation put by the Minister upon the 1934 Act. I hope he will put a broader interpretation on the present Bill, so that what the Commissioner desires can really be carried out. As regards the clearance of derelict sites the Commissioner says that he has only been prepared to grant an allowance for that purpose where it has been possible to develop the sites as potential seaside resorts, as he has been so restricted. Why should

this only take place in potential seaside resorts? Have the working people to go on living close to eyesores in the industrial centres? In the mining centres and steel centres, where there are these huge slag-heaps, it would be possible to build streets, parks, and promenades. Thousands of men and women who are working week after week cannot afford to go to seaside resorts and why should they not have beautiful parks instead of having to live among eyesores? They have cause to complain.
I speak on their behalf, on another matter. A few years ago I was speaking to a man who had been responsible for managing embassies in most of the big centres in the world. He said that while Berlin had its concrete roads running to the centre, Paris had its boulevards, New York had its Broadway and so on, London also had distinctive features which he admired more than those of any other capital in which he had lived. He did not say that because he was talking to an Englishman, for he was the type which would not care what we thought about what he said. He said he had been struck by the beautiful parks in London, which could be reached within a reasonably short time from any part of London—the Royal parks, St. James's Park, Hyde Park, Kensington Gardens, Regent's Park, Richmond Park and Kew Gardens. They are the admiration of all visitors to London, but w hat do we find? We find that the poor people in the Special Areas are having to pay a contribution towards the maintenance of these parks. The cost of upkeep falls not on the County of London or Westminster Council alone.

The Deputy-Chairman: That question does not arise on this Clause.

Mr. Smith: I am going to relate it to this Clause, and that will be clearly shown I have the opportunity of developing it. These parks are a charge on the Office of Works, and that means that instead of the County of London and the Westminster Council paying for the upkeep, the people living in the Special Areas are making the same contribution towards them as the people living in London. Therefore we say the time has arrived when the nation ought to be prepared to lay out beautiful parks in these other centres.

The Deputy-Chairman: That could not be done under this Clause.

Mr. Smith: What has been done in South Shields, where promenades have been laid and streets have been decorated with beautiful trees and flowers, could be clone in places where there are pit heaps if the Minister would interpret this Clause in the way we desire him to do.

6.31 a.m.

The Secretary of State for Scotland (Mr. Elliot): This seems to be a very popular Clause, and I am sure the Committee would wish to add it to the Bill. We have been urged to see that the Clause is expanded and that a liberal interpretation is given to it, and we shall do our best to see that that is done. The main anxiety seems to be for expedition under this Clause, but in fact we are anxious to get to work as soon as possible. I was asked one or two specific questions. The hon. Member for Chester-le-Street (Mr. Lawson) asked what was the origin of this Clause. The origin was that the local authorities themselves asked for it, particularly the local authorities in Durham. The Minister was also asked whether he could guarantee to give 100 per cent. grants. Of course he cannot give that guarantee although grants of 100 per cent. have been made in some exceptional cases. In reply to the hon. Member for Houghton-le-Spring (Mr. W. Joseph Stewart), more money could be allotted if necessary. The hon. Member for Pontypool (Mr. Jenkins) was quite enthusiastic about the Clause—

Mr. Jenkins: So far from being enthusiastic I said it was niggardly and mean.

Mr. Elliot: I dare say that is not enthusiasm. He said it was an advancement by steps towards a goal. I am sure that we admire the Parliamentary skill of the hon. Member for Stoke (Mr. Ellis Smith) in discussing a number of subjects which certainly touched on the fringes of this Clause, but I hope he will excuse me it, with my lesser Parliamentary skill, I do not follow him, in case I am not able to keep as well within the limits of order. The Committee is I am sure, anxious to add this Clause to the Bill and I will not stand in its way.

6.33 a.m.

Mr. Shinwell: I am sure the Committee is more than delighted to have had the

intervention of the Secretary of State for Scotland. We have, in fact been waiting for him for several hours, and I wondered how it was possible for him, having some experience of his temperament, to remain so quiet on the bench opposite. Now that he has awakened perhaps we may have the benefit of further interventions on his part. But let me disabuse his mind at once. There is not the slightest enthusiasm among my hon. Friends behind me for any part of the Clause.

Mr. Elliot: You have not been listening.

Mr. Shinwell: The right hon. Gentleman says that I have not been listening. I have been listening to every word spoken by my hon. Friends, and I am convinced that they do not regard this pittance—and I shall prove it before I sit down—to be of much value to the local authorities. Before the right hon. Gentleman intervened I was about to ask him to convey to his right hon. Friend whose absence I regret but understand in the circumstances the request to reconsider the first section of this Clause and on the Report stage to provide something more substantial. I still make that plea in the hope that it will be taken into account. In order to understand the full meaning of the Clause we must turn to the principal Act. For the convenience of Members I will read the pregnant Section. Under Section 5 we find that the functions of the Commissioners shall not include, among other things, the provision of financial assistance by way of grant or loan to any local authority. That was the position. It is the position now. No matter what the position was, how desolate, how devastating or how appalling to every sightseer, it was impossible, within the scope of the principal Act, to offer the least financial assistance. The Government recognised that that was an impossible situation, and after three years, during which we had many protests from local authorities as well as a definite expression of opinion from the Commissioner himself, the Government produce this small and pettyfogging proposal.
Perhaps the hon. Members will permit me to bring to their attention the statement of the Commissioner himself. This is what he said:
During my visits to the Special Area in Durham I have been much impressed with the deplorable condition of a number of private back streets.


He added that their appearance was unkempt, that they were in a muddy and sometimes filthy condition, and that as a result people who had to use them brought dirt into the houses, making it almost impossible to keep them clean. He added:
Many of these streets are little more than tracks which have never been taken over by the highway authority concerned.
In the absence of maintenance they had lapsed into a shocking condition:
The local authorities concerned are not prepared to accept the whole burden of liability, which is primarily the responsibility of the frontagers, nor even if they are willing to do so are they in a financial position to meet the cost.
It was because the pressure was so insistent in relation to this matter that the Government have now produced this part of the Clause. If the Government had decided to fix a definite figure, some figure approximating to what is the necessary expenditure, even it it were not 100 per cent., that would be regarded as an act of grace. But, in fact, the whole matter still remains in the hands of the Commissioner. He may grant 20 per cent. if he cares, which, of course, would be impossible. The local authorities would not proceed with their work. He might even provide 50 per cent., or he might provide 75 or 85 per cent., and I venture the opinion that the Commissioner would hardly provide more than 85 per cent. An 85 per cent. grant, although apparently of some advantage in the very stringent financial circumstances of the local authorities concerned, would be of no value at all. Any Act which imposes further financial burdens on the local authorities prevents work of that kind being undertaken. I am sure I speak not only with the support of Members behind me who represent Special Areas, but of Members in all quarters of the Committee who represent areas where the local authorities are overburdened by the financial difficulties which have been created in recent years.
I no longer appeal to the Secretary for Scotland, because he seems to be fast asleep. His eyes are closed. He seems to be languishing. He is paying not the slightest attention—Not that I expect him to pay any atention to me. I had experience of him when I was in this House

before. But this is not the time to discuss the right hon. Gentleman, although I would be happy to do so on some appropriate occasion. I appeal to the Committee in general in the hope that they will bring pressure to bear on the Government to do the appropriate thing in the circumstances and help these local authorities. This is not a revolutionary proposal. We are asking that a maximum figure—95 per cent. if you like—should be provided for in this Clause. That would be a reasonable figure to enable works of this kind to be undertaken. Whether the Government will respond favourably to our appeal I cannot say. I ask them to respond to this appeal, for unless they do this Clause will be of little value. Unless the Government are disposed to reconsider the matter I shall have the utmost pleasure in advising my friends to divide the Committee as a protest. I am sure we shall have the local authorities behind us. We are better acquainted with the opinion of the local authorities concerned than the Secretary for Scotland seems to be. We know of their difficulties and unless the Government respond to our appeal in a favourable fashion we shall have no alternative but to divide as a protest against the Governments parsimony.

6.46 a.m.

Mr. Maxton: I beg to move "That the Chairman do report Progress, and ask leave to sit again."
I have been present during the whole of the proceedings on the Committee stage of this Bill and have not occupied one minute of the Committee's time. I have listened carefully, and we have reached a stage of the proceedings when the principal spokesman for the official Opposition has presented to the Committee his conclusion regarding an important Clause. At such a time, out of the five representatives of the Government that are on the Front bench, four are apparently asleep. I hear an hon. Member say that if they were not it would not make any difference, but it would make some difference to their appearance and we ought to have some regard to the decencies of appearance in the House of Commons. I hear applause from another hon. Member who a few minutes ago was out of the world. If he knew how he looks when he is asleep he would make tremendous efforts to keep awake. I looked around and there was


apparently only one hon. Member, the representative of Chatham (Captain Plugge), who was taking an intelligent interest—and his constituency is at the furthest extreme from the Special Areas. I understand he is professionally interested in the broadcasting that goes on all night. That is, perhaps, why he appears before us at this hour as the only man fit to take an intelligent interest, and he, unfortunately, is not interested.
I have the greatest sympathy with that Patronage Secretary, as he knows, in the difficult work he has to perform in keeping the proceedings of the Committee moving along steadily to the timetable. But I think he has not any justification for keeping the Committee sitting at this hour on important business. It is business the country is interested in, and the country wants to read the Debate. The country has not an opportunity of reading a Debate which takes place at this time. I think that having made very substantial progress and having regard to the condition not only of the Members behind him hut to the condition of Ministers of the Crown sitting on the Treasury Bench, and to the obviously fagged condition in which he is himself, he should agree to the adjournment of the Debate. I have known him for years and I know that at this moment he is not at his best. In the course of another week or two there will be the Coronation festivities, and so on, in which he will be playing an important part. He ought to try to be looking his best at that time. He cannot look his best if he has many nights like this. He has made just as good progress as has ever been made with Government business at this stage of the Session. He is well on with every necessary part of the year's business, and it is just sheer cruelty to everybody concerned to ask the Committee to continue sitting. It may be he wants the discussion on this Bill to take place under conditions which will make that Debate a secret to the great body of people. I do take a decent part in the proceedings of this House. I hope I usually do it decently and I like to see the proceedings conducted in decency. But for the last two hours the work of the Committee has not been carried out in a decent and decorous fashion.

6.50 a.m.

Mr. K. Griffith: I should like to add my plea to that so eloquently put by the hon. Member for Bridgeton (Mr. Maxton). This is a matter of enormous importance to a very large number of people in the country. For myself I have been glad the galleries have been empty. I cannot think that it would have been a good thing or that it could have produced a good impression in the country if people could have seen the conditions under which this Debate has been carried on. I am not casting any blame on Ministers or Members, but there are limits to human endurance and I cannot believe that good legislation can be carried out with tired Ministers and exhausted Members. We owe it as a duty to the country on matters like this to work at our best, and look our best in conditions under which that can be done. There has been already a considerable amount of progress. The Amendments which have been debated have been Amendments largely moved from the Government side, and all sides of the Committee have had an opportunity of making their opinions known on a large part of the Bill. We shall shortly be approaching one or two very important Clauses of the Bill, and I think it would now be reasonable to ask that when we get to Clause 5 it should be taken when we are fresh. I hope and believe the Patronage Secretary will recognise the general feeling in the Committee.

6.52 a.m.

The Parliamentary Secretary to the Treasury (Captain Margesson): It seems to me that the Mover of this Motion and the hon. Gentleman who has just spoken could not have been in the House on Monday night when the agreement to which we were working to-night was come to across the Floor of the House between myself and the right hon. Gentleman who leads for the Opposition. In all quarters of the House, except in the case of the hon. Member for Camlachie (Mr. Stephen), who warned me he would not be any party to an agreement and that this might take some time before it was disposed of, an agreement was come to that we should proceed and complete the Committee stage of this Bill after the Budget resolutions had been completed, and it was further agreed that it did not seem to be necessary that the House should sit unduly late. The


hon. Member for Bridgeton (Mr. Maxton) said he had never known any good work done in the late hours of the night or the early hours of the morning. I think his memory is a little short. I remember taking part not so long ago in a Debate on the Supplementary Estimates. There was a terrific Debate that night between the hon. and learned Member for East Bristol (Sir Stafford Cripps) and my right hon. Friend the present Minister of Agriculture. It was a first class Debate and there was no question of members being too tired to take part in it. The hon. Member made a complaint that my appearance is not what it should be. I do not wish to indulge in any personal remarks or comments upon his appearance. My view is that he looks just about the same now as he always does. I think he looks as if he was full of heart and good fight and able to do his best work. For these reasons I regret it is impossible for the Government to accept the Motion and we must proceed until the Committee stage is completed.

6.55 a.m.

Mr. Shinwell: For once I find myself entirely in agreement with the right hon. Gentleman. We are just as full of fight now and just as ready to continue the Rebate. I should like to correct the right hon. Gentleman as regards the proceedings on Monday night, at the conclusion of the Debate. The right hon. Gentleman who leads the Opposition was very careful indeed not definitely to pledge himself as to subsequent proceedings. I think that will be within the recollection of the right hon. Gentleman opposite. It is true that some conversations proceeded as regards the possibility of concluding the Debate on Monday at 11.30, and there was a kind of loose understanding that if at all possible, the subsequent proceedings might be confined to one Debate, however long it proceeded, but there was no more than that. I am bound to say in reply to the right hon. Gentleman that one incident occurred in the course of our proceedings in the early hours of the morning when he exercised his right to move the Closure at what we thought was an inappropriate moment. We do not feel disposed to quarrel with the right hon. Gentleman if he uses the forces at his disposal, and we are ready to accept the challenge. I agree with

him that I can hardly believe that the hon. Member for Bridgeton (Mr. Maxton), after a few hours of debate has lost any of his remarkable faculties. I think he is capable of proceeding and of assisting hon. Members above the Gangway in standing up to the Government and carrying on this Debate so long as we are permitted to do so, having regard to the desire of the right hon. Gentleman to Closure us. I support the rejection of the motion.

6.58 a.m.

Mr. Maxton: All my natural instincts are to take that course, but I know these all-night sittings. It is just silly. I have seen it dozens of times, but I say it is futile and silly. There are occasions when it has got to be done, but I am perfectly certain this is not one of them. If the proceedings go on I will certainly take my part and be in it to the end. I think it would be a better thing for the Committee if we did not go on. The right hon. Gentleman knows perfectly well that the hon. Member for Camlachie (Mr. Stephen) reported to me what took place in the so-called negotiations and there were two or three qualifications in it. First, that this Bill was to be started at a reasonable hour, or rather, that the Budget Debate was going to finish before the ordinary Parliamentary hour. But it went on to the ordinary time; there was full Parliamentary time taken up with the Budget. Secondly, there was no firm understanding that it was going to be finished on the one vote. As a matter of fact in the printed business for next week, in the business that the Patronage Secretary himself drafted, he makes an intimation of the continuation of this Measure.

Captain Margesson: I think it says "consideration of further stages of the Special Areas Bill."

Mr. Maxton: I have got it here and we will have it precise and accurate. The right hon. Gentleman knows that I have a long experience of his way of arranging business. He does not say "Special Areas Bill, consideration of further stages". He says "Special Areas Bill, further consideration", and he says that because he does not know whether, on Monday, he will be doing Report stage, Third Reading or Committee stage, and that is why he uses that


phraseology. If he had been going to have a Third Reading on Monday he would have put Third Reading down, as he does with other Measures, such as "Livestock Industry Bill, Third Reading", but on the Special Areas Bill he puts down "further consideration", because he has in his mind that he will be more than lucky if he finishes the Committee stage today. I ask him not to be hoity-toity and encourage hoity-toitiness on the part of his opposite number. In my experience, this is the first Leader of the Official Opposition to refuse to vote on an all-night sitting on a Motion to report Progress. I think it must be the first occasion when the Leader of the Opposition, who has been stone-walling all night, refused to make use of the report Progress vote. I can understand that it would be derogatory to his position if he deigned to vote for a Motion put forward by my hon. Friend (Mr. Stephen) and myself. While I regret very much having to go into the division lobby without him, my hon. Friend the member for Camlachie and myself will divide the Committee on this matter.

7.4 a.m.

Captain Margesson: I do not want to interfere in this brotherly or step-brotherly matter which is going on, except to tell the hon. Member for Bridgeton (Mr. Maxton) that although he may think that he knows what was in my mind when I drafted this list, he is wrong. I put down "further consideration, and if there is time, other orders" for the reason that I could not put down "Third Reading" because there might have been a Report stage. It may have been that some hon. Member, perhaps the hon. Member for Bridgeton himself, could so convince the Government of the strength of his case that we should have found ourselves in a position where we should have had to accept an Amendment.

Mr. Batey: The Prime Minister said yesterday that there would not be a Report stage.

Captain Margesson: I could not put down "Report and Third Reading." This is a Bill founded on a Ways and Means Resolution and it could go only one stage at a time. It is a trivial point, but I thought that I must deal with it.

7.6 a.m.

Mr. Stephens: I am told that hon. Members above the Gangway are not going to support this Motion, and I hope that if they are not going to support the Motion they will not take up time afterwards in complaining that we are going on through the night in discussing this important Measure. I hope at least that the hon. Member for Seaham (Mr. Shinwell) will get his colleagues, if they are not going to vote for the Motion, to go on with their claims about taking this Bill at this time. There have already been many objections made by hon. Members above the Gangway about it being taken at this hour.

Mr. Pritt: There have been none at all.

Mr. Stephen: It is within the recollection of the Committee that a complaint has been made about taking this important Measure at this hour. If the hon. and learned Member for North Hammersmith (Mr. Pritt) has not heard it, it shows that he has been sleeping a good part of the time, or at least that is my impression. The complaint has been made with regard to this Measure. If hon. Members are going to take this bad advice and make this precedent, which I think is a most ridiculous precedent, then I suggest that the precedents should be for the good of the working classes of the country and for the development of liberty. There is a very real ground of complaint that this Measure should be discussed by hon. Members after the very long sitting we have had. I certainly will vote for the Motion to report Progress.

7.9 a.m.

Sir S. Cripps: I would like to explain how it comes about that this Motion is being moved. During the absence of the right hon. Gentleman we were unfortunate to have the House left in charge of the Secretary of State for Scotland. He rose to the Debate and then collapsed on the Front Bench. So realistic was the sight of the Front Bench that I came to the conclusion that as we were dealing with the subject of streets they were trying to convince us they were on the Embankment. It was as the result of fellow-feeling, seeing the extreme distress of the Secretary of State for Scotland, that my hon. Friend was compelled to put forward the Motion. I agree with the hon. Member for Seaham (Mr. Shinwell) that as far as


we are concerned we have no hestitation or doubts regarding the proceedings. We are sorry that the straits of the Secretary of State for Scotland have led to this delay in the proceedings, but he must accept the entire responsibility, as long as he proceeds to look like someone down and out. He is getting lower and lower and unless he is careful he will fall off the Front Bench altogether. The longer he persists so to look I am afraid the more dilatory the proceedings will be. It looks—though one's eyes may be a little tired with the night's proceedings—as if at this moment there were two long ears of a donkey protruding from the Front Treasury Bench. I trust in these circumstances we shall feel none the less some compassion in our hearts for the circumstances which have so reduced what was once so fine a man to these straits. Our grief is as great as our sympathy but we feel still that if right hon. Gentlemen opposite wish to continue with a colleague in such a state, they must carry their responsibility themselves, and if the country has an opportunity of knowing of the state of the Treasury Front Bench it may possibly facilitate their removal.

7.13 a.m.

Mr. Davidson: I rise to support the official Opposition's attitude with regard to the Motion to report Progress. I should like to appeal to the hon. Member for Bridgeton (Mr. Maxton) and the hon. Member for Camlachie (Mr. Stephen)

that, having taken up the stand we have taken against a very important piece of legislation, and having shown so conclusively that as an Opposition we are not going to take any part or parcel in this Bill, they should withdraw the Motion and leave the Opposition to carry out the work of showing up this Bill. I agree entirely with the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps) with regard to the cause of this Motion being made, and I want to assure him that as far as the Scottish Members are concerned, we are not worrying too much about the appearance of the Scottish Secretary. After careful scrutiny we now feel perfectly assured that if in the North of Scotland we lose that great attraction the Loch Ness monster, we will always have a very adequate substitute. Therefore I appeal to the hon. Members below the Gangway that, because of the great provocation we have had from the scenery before us and the lack of logical argument in support of the Bill which goes to the very roots of the poverty problem in Scotland, and because of the arrogant attitude of the Patronage Secretary himself, who has acted in a way unworthy of any adviser of the Government, they should withdraw their Motion and let the Opposition continue their work.

Question put "That the Chairman do report Progress, and ask leave to sit again."

The Committee divided: Ayes, 16; Noes, 111.

Division No. 156.]
AYES.
[7.14 a.m.


George, Megan Lloyd (Anglesey)
Macmillan, H. (Stockton-on-Tees)
Smith, E. (Stoke)


Griffith, F. Kingsley (M'ddl'sbro, W.)
Maxton, J.
Tinker, J. J.


Hail, J. H. (Whitechapel)
Parkinson, J. A.
Windsor, W. (Hull, C.)


Henderson, J. (Ardwick)
Roberts, W. (Cumberland, N.)
Woods, G. S. (Finsbury)


Kelly, W. T.
Seely, Sir H. M.



Macdonald, G. (Ince)
Smith, Ben (Rotherhithe)
TELLERS FOR THE AYES.—




Mr. Stephen and Mr. Acland.




NOES.


Agnew, Lieut.-Comdr. P. G.
Cary, R. A.
Emery, J. F.


Albery, Sir Irving
Castlereagh, Viscount
Evans, Capt. A. (Cardiff, S.)


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Channon, H.
Everard, W. L.


Aske, Sir R. W.
Clarke, Lt.-Col. R. S. (E. Grinstead)
Findlay, Sir E.


Assheton, R.
Cobb, Captain E. C. (Preston)
Furness, S. N.


Balfour, Capt. H. H. (Isle of Thanet)
Colville, Lt.-Col. Rt. Hon. D. J.
Fyfe, D. P. M.


Barclay-Harvey, Sir C. M.
Courtauld, Major J. S.
Goldie, N. B.


Beaumont, Hon. R. E. B. (Portsm'h)
Crookshank, Capt. H. F. C.
Graham, Captain A. C. (Wirral)


Boulton, W. W.
Crowder, J. F. E.
Grant-Ferris, R.


Bower, Comdr. R. T.
Davidson, Rt. Hon. Sir J. C. C.
Grimston, R. V.


Bowyer, Capt. Sir G. E. W.
Davies, Major Sir G. F. (Yeovil)
Groves, T. E.


Braithwaite, Major A. N.
Dawson, Sir P.
Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)


Brass, Sir W.
Doland, G. F.
Guinness, T. L. E. B.


Brown, Rt. Hon. E. (Leith)
Dorman-Smith, Major R. H.
Hannah, I. C.


Burghley, Lord
Duncan, J. A. L.
Hannon, Sir P. J. H.


Campbell, Sir E. T.
Eckersley, P. T.
Harbord, A.


Cartland, J. R. H.
Elliot, Rt. Hon. W. E.
Heilgers, Captain F. F. A.




Herbert, Major J. A. (Monmouth)
Mellor, Sir J. S. P. (Tamworth)
Strauss, E. A. (Southwark, N.)


Holmes, J. S.
Mills, Major J. D. (New Forest)
Strickland, Captain W. F.


Hope, Captain Hon. A. O. J.
Morris-Jones, Sir Henry
Stuart, Hon. J. (Moray and Nairn)


Hopkinson, A.
Nicolson, Hon. H. G.
Sutcliffe, H.


Hudson, Capt. A. U. M. (Hack., N.)
Patrick, C. M.
Taylor, Vice-Adm. E. A. (Padd., S.)


James, Wing-Commander A. W. H.
Peake, O.
Thomas, J. P. L.


Joel, D. J. B.
Peters, Dr. S. J.
Touche, G. C.


Kerr, J. Graham (Scottish Univs.)
Petherick, M.
Tree, A. R. L. F.


Law, R. K. (Hull, S.W.)
Plugge, Capt. L. F.
Tufnell, Lieut.-Commander R. L.


Leckie, J, A.
Raikes, H. V. A. M.
Turton, R. H.


Leighton, Major B. E. P.
Rathbone, J. R. (Bodmin)
Wakefield, W. W.


Liddall, W. S.
Raid, W. Allan (Derby)
Ward, Lieut.-Col. Sir A. L. (Hull)


Llewellin, Lieut.-Col. J. J.
Robinson, J. R. (Blackpool)
Ward, Irene M. B. (Wallsend)


Loftus, P. C.
Ropner, Colonel L.
Watt, G. S. H.


Mabane, W. (Huddersfield)
Ross Taylor, W. (Woodbridge)
Williams, H. G. (Croydon, S.)


McCorquodale, M. S.
Salt, E. W.
Wise, A. R.


MacDonald, Rt. Hon. M. (Ross)
Samuel, M. R. A.
Wragg, H.


McKie, J. H.
Sanderson, Sir F. B.



Macnamara, Capt. J. R. J.
Scott, Lord William
TELLERS FOR THE NOES.—


Margesson, Capt. Rt. Hon. H. D. R.
Shaw, Major P. S. (Wavertree)
Sir James Blindell and Captain


Mathers, G.
Southby, Commander A. R. J.
Waterhouse.


Mayhew, Lt.-Col. J.
Stourton, Major Hon. J. J.

Question again proposed, "That the Clause stand part of the Bill."

7.23 a.m.

Sir S. Cripps: May I ask a question of the Minister of Labour? I understand that he has ascertained that the view as regards the inter-action of Subsection (2) on Subsection (6) of Section I of the old Act is not exactly that which he mentioned in an earlier speech, and that, in fact, as I suggested Subsection (6) cannot operate on the subject-matter of Subsection (2). What I would ask him to do if he would be good enough, would be to consider whether some words could be inserted making it quite clear which it is, because at present, obviously, it is not clear which it is. I happened to spend yesterday arguing very much such a case in court, which could have been disposed of completely if clear words had been put in here, and I do ask him to see that whatever his meaning on this may be it is made abundantly clear in the final form of the Bill.

Mr. E. Brown: I think that the position is all right, but I will have it looked at again.

7.25 a.m.

Mr. David Adams: I am sorry at this early hour to detain the Committee, but I rise for the purpose of obtaining information, and I propose to make an appeal to the Minister. May I say that Clause 4 expressly states that the Commissioner is authorised to make a grant towards any expenses incurred by a local authority in the repair or improvement of streets in any special area. I would like the Minister to note the word "improvement." In the constituency that I represent, Consett, there are probably more

coal pits in use and out of use than in any other part of County Durham, and, as has been customary, there is the usual output of pit heaps to be seen almost contiguous to many of the streets in that constituency. Some of those pit heaps are above the thoroughfares, some are below, and some are just level with them. The great majority are burning pit heaps, emitting at different times flames, and pungent and poisonous sulphurous and other smoke. The result is that there is damage to many of the streets, particularly where the houses, owing to the pressure of land accommodation, are built contiguous to those burning heaps. The question of dealing with these has received the serious consideration of the local authorities in the area, and it has been brought to the attention of the Minister of Health primarily because the health of the community there is immediately seriously endangered.

The Deputy-Chairman: Whether this Clause stays in or goes out will not enable the Commissioners to do anything about it.

Mr. Adams: I want to explain the position as I see it very shortly, that is that the presence of the burning pit heaps impairs the quality of the streets. Property is being depreciated by at least 25 per cent. due to the burning heaps. Under the Clause the Commissioner may be empowered to assist the local authority to extinguish these heaps, and I know of nothing that would improve the streets more. From the point of view of the local authorities, whose property in the streets is being damaged, and from the point of view of the occupants of the houses, whose houses and property inside, are damaged, it would be an improvement for which the people of the


city would be everlastingly grateful. I want to ask whether the Minister does not agree that this might be a genuine case for an improvement.

7.29 a.m.

Mr. Batey: I just want to ask the Minister one question on the first part of the Clause. I have listened to most of the debate all night, and this is the first word I have uttered. There is a matter that is in my mind, and it has not been raised in the debate, so I take the opportunity just to put a question to the Minister. It seems to me that Sub-section (1) of Clause 4, naturally follows the 1934 Act, where the 1934 Act provided for the beautifying of districts by the removal of slag-heaps at pit heads. Following on that, it seems to me, comes the repair of the streets. Will the Commissioner deal with the repair of the streets as he dealt with slag and pit heaps. The progress there has been far from satisfactory. Unemployed men are

engaged and provided with boots. The Commissioner gives them 9d. per day. In the matter of the streets will the Commissioner, when he contributes, do so not on this cheap system but on such a scale as to allow of the payment of a proper wage? There is nothing that annoys me more than the Commissioner taking liberties with men who do extremely hard work and are then being paid 9d. per day. I hope that we are not having this under the Clause. I would like an assurance that the Commissioner will pay the local authorities a sufficient sum to warrant them paying the men a decent and reasonable wage.

Captain Margesson rose in his place, and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The Committee divided: Ayes, 113; Noes, 45.

Division No. 157.]
AYES.
7.31 a.m.


Acland, R. T. D. (Barnstaple)
Fyfe, D. P. M.
Peters, Dr, S. J.


Agnew, Lieut.-Comdr. P. G.
Goldie, N. B.
Petherick, M.


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Graham, Captain A. C. (Wirral)
Plugge, Capt. L. F.


Aske, Sir R. W.
Grant-Ferris, R.
Procter, Major H. A.


Assheton, R.
Griffith, F. Kingsley (M'ddl'sbro, W.)
Raikes, H. V. A. M.


Balfour, Capt. H. H. (Isle of Thanet)
Grimston, R. V.
Rathbone, J. R. (Bodmin)


Barclay-Harvey, Sir C. M.
Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)
Reid, W. Allan (Derby)


Beaumont, Hon. R. E. B. (Portsm'h)
Guinness, T. L. E. B.
Robinson, J. R. (Blackpool)


Boulton, W. W.
Hannah, I. C.
Ropner, Colonel L.


Bower, Comdr. R. T.
Hannon, Sir P. J. H.
Ross Taylor, W. (Woodbridge)


Bowyer, Capt. Sir G. E. W.
Heilgers, Captain F. F. A.
Salt, E. W.


Braithwaite, Major A. N.
Hepburn, P. G. T. Buchan-
Samuel, M. R. A.


Brass, Sir W.
Herbert, Major J. A. (Monmouth)
Sanderson, Sir F. B.


Brown, Rt. Hon. E. (Leith)
Holmes, J. S.
Scott, Lord William


Burghley, Lord
Hope, Captain Hon. A. O. J
Seely, Sir H. M.


Campbell, Sir E. T.
Hopkinson, A.
Shaw, Major P. S. (Wavertree)


Cartland, J. R. H.
Hudson, Capt. A. U. M. (Hack., N.)
Southby, Commander A. R. J.


Gary, R. A.
James, Wing-Commander A. W. H.
Stourton, Major Hon. J. J.


Castlereagh, Viscount
Joel, D. J. B.
Strauss, E. A. (Southwark, N.)


Channon, H.
Kerr, J. Graham (Scottish Univs.)
Strickland, Captain W. F.


Clarke, Lt.-Col. R. S. (E. Grinstead)
Law, R. K. (Hull, S. W.)
Stuart, Hon. J. (Moray and Nairn)


Cobb, Captain E. C. (Priston)
Leckie, J. A.
Sutcliffe, H.


Colville, Lt.-Col. Rt. Hon. D. J.
Leighton, Major B. E. P.
Taylor, Vice-Adm. E. A. (Padd., S.)


Courtauld, Major J. S.
Liddall, W. S.
Thomas, J. P. L.


Crookshank, Capt. H. F. C.
Llewellin, Lieut.-Col. J. J.
Touche, G. C.


Crowder, J. F. E.
Loftus, P. C.
Tree, A. R. L. F.


Davidson, Rt. Hon. Sir J. C. C.
Mabane, W. (Huddersfield)
Tufnell, Lieut.-Commander R. L.


Davies, Major Sir G. F. (Yeovil)
McCorquodale, M. S.
Turton, R. H.


Dawson, Sir P.
MacDonald, Rt. Hon. M. (Ross)
Wakefield, W. W.


Doland, G. F.
McKie, J. H.
Ward, Lieut.-Col. Sir A. L. (Hull)


Dorman-Smith, Major R. H.
Macnamara, Capt. J. R. J.
Ward, Irene M. B. (Wallsend)


Duncan, J. A. L.
Margesson, Capt. Rt. Hon. H. D. R.
Watt, G. S. H.


Eckersley, P. T.
Mayhew, Lt.-Col. J.
Williams, H. G. (Croydon, S.)


Elliot, Rt. Hon. W. E.
Mellor, Sir J. S. P. (Tamworth)
Wise, A. R.


Emery, J. F.
Mills, Major J. D. (New Forest)
Wragg, H.


Evans, Capt. A. (Cardiff, S.)
Morris-Jones, Sir Henry



Everard, W. L.
Nicolson, Hon. H. G.
TELLERS FOR THE AYES.—


Findlay, Sir E.
Patrick, C. M.
Sir James Blindell and Captain Waterhouse.


Furness, S. N.
Peake, O.





NOES.


Adams, D. (Consett)
Burke, W. A.
Dobbie, W.


Adamson, W. M.
Cripps, Hon. Sir Stafford
Dunn, E. (Rother Valley)


Barr, J.
Daggar, G.
Ede, J. C.


Batey, J.
Davidson, J. J. (Maryhill)
Edwards, Sir C. (Badwellty)




Frankel, D.
McEntee, V. La T.
Smith, E. (Stoke)


George, Megan Lloyd (Anglesey)
Macmillan, H. (Stockton-on-Tees)
Smith, T. (Normanton)


Griffiths, J. (Llanelly)
MacMillan, M. (Western Isles)
Stephen, C.


Hall, J. H. (Whitechapel)
Maxton, J.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Henderson, J. (Ardwick)
Parkinson, J. A.
Taylor, R. J. (Morpeth)


Jagger, J.
Potts, J.
Tinker, J. J.


Jenkins, A. (Pontypool)
Pritt, D. N.
Watson, W. McL.


Jenkins, Sir W. (Neath)
Ritson, J.
Windsor, W. (Hull, C.)


Kelly, W. T.
Roberts, W. (Cumberland, N.)
Woods, G. S. (Finsbury)


Lawson, J. J.
Sexton, T. M.



Leslie, J. R.
Shinwell, E.
TELLERS FOR THE NOES.—


Macdonald, G. (Ince)
Smith, Ben (Rotherhithe)
Mr. Groves and Mr. Mathers.

Question put accordingly, "That the Clause stand part of the Bill."

The Committee proceeded to a Division; Sir JAMES BLINDELL and Captain WATER-HOUSE were appointed Tellers for the Ayes, but there being no Members willing to act as Tellers for the Noes the CHAIRMAN declared the Ayes had it.

CLAUSE 5.—(Financial assistance for provision of factories in certain other areas.)

7.40 a.m.

Mr. R. Acland: I beg to move, in page 2, line 34, after the word "providing," to insert the words "a factory or."
This Amendment is put down to safeguard the position of the single factory in the small areas. Is it covered?

The Financial Secretary to the Treasury (Lieut.-Colonel Colville): I think I can reassure the hon. Gentleman. I do not propose at the present moment to go into the merits of a case specifically restricted to one factory. The position is covered.

Amendment, by leave, withdrawn.

7.42 a.m.

Mr. Acland: I beg to move, in page 3, line 18, at the end, to insert:
and any area to which the Minister directs that this section shall apply shall be deemed to have been added to the areas specified in the First Schedule to the principal Act for all purposes save that government assistance of the kinds contemplated by the principal Act and by this Act shall be given in such areas in accordance with the terms of this section and of section six of this Act and not otherwise.
This may be called the Nuffield Trustees Enabling Amendment, and as such I invite the Committee to give it very serious consideration.
There has been throughout all the Debates one point on which we have all been almost unanimous—and it is a terrible pity that the Special Areas Act extends only to such new areas. There

was nearly a revolt in the Party opposite on facilities to extend the areas, and something should be done outside the Special Areas under Schedule 1 to the Act of 1934.
Something is done by Sections 5 and 6, however little; but I have put down this Amendment in the hope that something more can be done in these areas outside the Special Areas. For the purpose I ask the co-operation and support of all parties in the Committee.
I wrote to the Nuffield Trustees to ask the position, and this is part of the reply:
The Trust is to adopt any measures which may, in the judgment of the Trustees, tend or conduce to the economic elevation of the Special Areas. For the purpose of the Deed, Special Areas are defined as areas specified in the First Schedule to the Act of 1934, including anything added thereto by any amending or modifying Act.
Therefore, it became obvious to me that if we could add the certified areas to the Act of 1934 the Nuffield Trust Deed would apply to them. But an Amendment stopping short there would be out of order, and in order not to increase the charge I was forced to word this Amendment in this somewhat obscure way:
Any area to which the Minister directs that this section shall apply shall be deemed…
That is to achieve my purpose. The remainder is to put it in order. It puts me in order because it does not increase the charge. It simply means that for Government purposes the only assistance to be given in those areas is in accordance with Sections 5 and 6 and not otherwise; but that for all other purposes certified areas are to be reckoned as if they had been added to the First Schedule of the Act of 1934 by an amending Act. The question will naturally arise, what do the Nuffield Trustees themselves think of this Amendment? I wish to make it clear that I have not moved this on their advice or suggestion or,


indeed, with their approval. But I informed them that I was moving this Amendment and their reply says:
I will bring your Amendment to the notice of the Trustees; but I cannot think of the ground they could have to take exception to your putting forward your Amendment or to any decision that it may be wise to reach upon it.
Therefore the Committee is free to make up its mind one way or the other whether the Nuffield Trustees shall be given a chance of operating in the areas which may become certified areas from time to time. I would ask Ministers to allow the Committee to decide this on principle, and, if there are technical errors, not to defeat the Amendment on technicalities which would be put right with the good-will and co-operation of Government advisers in another place having regard to the arguments for and against the proposition that the Nuffield Trustees should be given an opportunity of operating within these certified areas. The first thing which comes to my mind is, Why should they not? They are not compelled to act if they do not think fit. If nobody puts up an attractive proposition they will do nothing. Some people might say, "Why squander the money of the Nuffield Trustees? Why not get all the money of the Nuffield Trustees to the areas where unemployment is worst?" That would be a valid reason if it were true to say that in every case the worst unemployment was to be found in the distressed areas. Moreover, by the terms of Clause 5 of the Bill it will be impossible for any area to become certified which ought not morally to be a Special Area, because no area will become certified unless it has had severe unemployment for a considerable time, and unless someone is satisfied that without financial assistance it cannot recover and that it has been dependent on one or two industries. Therefore, no area is going to become a certified area which is not in fact a Special Area in everything except name.
I hope that the Amendment will make an appeal to those hon. Members whose constituencies are depressed but are not scheduled as Special Areas, and I hope that it will make an appeal also to hon. Members for those constituencies which, though not distressed as a whole, have within their boundaries those little

pockets of unemployment which are a deplorable feature of so much of our countryside. One cannot quite divorce one's mind from considerations of conditions in one's own constituency, and I cannot help thinking of the little port in North Devon with the picturesque name of Appledore. The Special Areas impose themselves upon us by the sheer magnitude of their misery, though to those who have to live there I do not think there is much difference between them and one of these distressed villages. The work is gone from these little places, and there is the same hopelessness and the same despair. As to the hon. Members who represent Special Areas, the considerations must be rather different and I must make them a rather different appeal. I appeal to their sense of fair play, and no-one will think that I am exaggerating the effect which the Special Areas (Amendment) Act will have. I believe that in the distressed areas, because of the activity of the Commissioner under these Acts, there is a feeling that somebody representing this great nation cares and that there is someone to whom they can go for advice and encouragement, but in these great constituencies—Glasgow, Middlesbrough and others—which ought to be Special Areas but are not, and in these little pockets of unemployment scattered about the country, we feel that we are forgotten and nobody cares at all and that nothing is ever going to be done. As long as unemployment was treated as one great problem throughout the country we felt that we were part of it and that Government effort was in part being directed towards us. Now that we have these Special Areas, and we are left out, it seems that the whole attention of the Government is being diverted to the Special Areas and nobody cares for those little areas where the problem is every bit as great to the people who happen to live in them.
In the Nuffield Trustees we have a great instrument. I use the word "great." I do not want to exaggerate or glorify private charity, but I think the Nuffield Trustees deserve the word "great." Of course, it is not "great" in relation to what might be done by Governments, but it really is a considerable size in comparison with what is done by Governments. Therefore, we


appeal to the representatives of the distressed areas. We are not asking for the whole of the Nuffield Trustees' money, but we ask for hope that somewhere there will be an organisation to which we can go, and, if we put up an attractive proposition, may receive some assistance. I appeal to all sides of the Committee. This is an absolutely nonparty matter. No political principle is involved. Rather, I would say that it is an all-party matter, because Members of all parties have already expressed their desire for something to be done for areas outside the Special Areas, and I do hope that the Government will not feel frightened that if this Amendment goes through we shall get the whole of a Report stage.

7.59 a.m.

The Chairman: Before I put this Amendment I ought to tell the Committee what I told the hon. Member himself. I had made up my mind not to select it because I thought that either it did nothing or, if it did anything, it changed the charge. Then the hon. Member was good enough to explain to me the intention, which was apparently to describe other areas as Special Areas for the purposes of a special trustee of which, officially, this Committee and I know nothing. Whether it achieves that object or not I cannot say, but I think there will be a doubt whether this Amendment would do what apparently it purports to do and prevent these areas coming within the definition of Special Areas for the purpose of grants under the original Act, because the hon. Member says they shall be deemed to have been added to the Special Areas for all purposes save Government assistance, leaving out certain words:
shall be given in accordance with the terms of this section and not otherwise.
What "in accordance with the terms of this Section" means I have not the slightest idea, unless it means that they are to be Special Areas. In the circumstances, I am prepared to put the Amendment to the Committee in order that the matter may be discussed, at any rate, up to a certain point; but if I put it to the Committee it must be with the reservation that I have some doubt whether or not it is in order.

Mr. Cartland: What is there to prevent the Nuffield Trust deeds being altered so

that the Trust may include within its terms a certified area, so as to bring these into the Bill?

Mr. Acland: It would be a very difficult process, I understand, because whereas an ordinary agreement between the hon. Member and myself could be altered by mutual agreement in the case of a trust deed there are further parties to it than the person who is giving the money or who has been made trustee. There are the people for whose benefit the trust is intended, and I am told it would mean going to court. It would probably be possible with only great difficulty to collect the beneficiaries together.

8.4 a.m.

Mr. J. Griffiths: I represent a division which is in exactly the same position as the one referred to by the hon. Member for Barnstaple (Mr. Acland). I feel in some doubt and difficulty about this Amendment. I am not clear in my own mind how Clause 5 is going to work. It refers to certain certified areas, and in order to be certified these areas must conform to certain conditions which are laid down. The provision makes it very evident that there are areas which have become Special Areas since the 1934 Act was passed. At that time they were excluded by the Commissioner because he had to be satisfied that the amount and length of unemployment was such as to justify them being described as Special Areas. Now the Minister has brought in this new Clause because, since 1934, and particularly during the last twelve or eighteen months, representations have been made to the Government that there are areas which have no hope of recovery unless there is outside assistance, and that those areas have neither the resources, nor the finances, nor any hope of being able to recover without outside assistance. They must have some kind of assistance which, so far, has not been extended to them.

The Chairman: I think what the hon. Member is saying now will come better on the Question, "That the Clause stand part," and not on this particular Amendment.

Mr. Griffiths: I will limit myself on this point. That is why I would support the Amendment. There is provision in Clause 5 for the setting up of a site company. Unless some such body as the Nuffield Trustees provide the initia-


tive and the money, who else is there? But I will deal with that point on the question, "That the Clause stand part."

8.6 a.m.

Lieut.-Colonel Colville: I quite recognise the hon. Member's anxiety to know more about the Clause. As to the point raised by the hon. Member for Barnstaple (Mr. Acland), this is the position as I see it: The Nuffield Trust was established at a time when there were certain scheduled Special Areas, and the trustees said they would be willing to operate in these areas and in others which might be scheduled, but since that date there have come into being, or are to come into being, some which were not Special Areas but are Certified Areas. I do not feel it would be right for Parliament to pass the Amendment simply in order to bring the Nuffield Trustees to operate in these areas. That must be a matter for the Nuffield Trustees themselves to decide. I quite realise that it might mean that they would have to take certain steps to get their declaration of trust altered, but I do urge the Committee to consider the view which the Government hold, that it would not be proper for Parliament to pass the Amendment for the purpose of bringing the Nuffield Trustees to operate in an area, having in view that this is a new development for the certification of areas. If the Nuffield Trustees wish to operate in these new certified areas, it would be proper for them to consider that question and to take the necessary steps if they so desire. For these reasons I do not feel we can accept the Amendment, apart from the question of charges, which I have not entered upon.

8.8 a.m.

Sir S. Cripps: As regards what the right hon. Gentleman has just said, I do not think he has quite put the matter in its right perspective. This will not compel the Nuffield Trustees to do anything at all; all it would mean is that it would widen the area of their own permissive powers. They would be perfectly at liberty to say, "We will not spend a shilling in these certified areas," but, if they want to, it would enable them, without the very complicated and difficult procedure of the courts, to get their area extended into a certified area. It is not a very simple thing to get the area of a trust altered. There generally has to be

some very good reason. The Attorney-General, as a rule, opposes such a thing, especially with a recently-made trust of this kind, where there is contemplated in the trust deed an Amendment of the Schedules by a subsequent Act. That is already contemplated in the trust deed, and on the question of extending it beyond that area into these certified areas it would be extremely difficult for the trustees to get that permission from the courts if Parliament, having had this before them, had said, "We do not propose to do anything to help in that respect. That is a matter which can be brought up in the courts with arguments." If there were some such Amendment as this—I am not suggesting that there should be these precise words—were decided upon, it could be done by a specific Clause saying that the Nuffield Trust shall extend to these areas, without raising any question such as charges.
As regards the question of increasing the field of the trust there would be no difficulty about a special Clause to say that the Nuffield Trust shall extend to these areas. You can always alter trusts by Act of Parliament if you want to. I suggest that the Government should not take a final view on this matter until they have had an opportunity of going a little bit further into it. The Attorney-General could be of great assistance, because he is the guardian of charity in the courts of the country. He could say what attitude he would take up if this matter came before the courts. But, unfortunately, we have not had the Opportunity of having any of the Law Officers here during the whole of this Debate, which really is a serious matter. I am not raising a debating point. We have had any number of points of law raised, and we have not had any assistance from any legal Member of the Government. I do ask the right hon. Gentleman to hold up his decision on this matter until consultation has taken place, because I believe that what hon. Gentlemen opposite would like, as well as hon. Members here, is that by some means or another the Nuffield Trust should have the possibility of dealing with these certified areas, and it would, I think, meet the views of all parties if that could be accomplished by putting a special Section in this Act in another place rather than leaving it to a very difficult position in the courts.

Lieut.-Colonel Colville: I am perfectly prepared to consider what the hon. and learned Gentleman has said in relation to the Nuffield Trust. What I do say is that this is hardly the proper way of dealing with it. We are perfectly prepared to consider the matter, but we do not feel that the amendment would be the proper way of dealing with it.

Mr. Acland: Does that mean that the Government will make an approach to the trustees to find out what are their views on this matter; or will they leave it to the Nuffield Trustees to take the initiative? I may withdraw the Amendment if the right hon. and gallant Gentleman can assure me that he will take the initiative in raising this point and finding out their views.

The Chairman: I think I can help the hon. Member, because I have now come definitely to the conclusion that I must rule the Amendment out of Order. The discussion may, perhaps, have achieved the hon. Member's object so far as can be. What I want to point out to the Committee is that, not only is it at least arguable that the Amendment does not exclude these certified areas from becoming beneficiaries under the principal Act as Special Areas, but, now that attention has been drawn to the question of the Nuffield Trust, it means that this would be legislation of a kind which would make it necessary for the Clause to be referred to the Examiners and for the Bill to become a hybrid Bill.

8.12 a.m.

Mr. Pritt: On a point of Order. May I make this submission? If there is in existence a trust which say, that, when the Government, by Schedule or otherwise, stamps certain areas, surely you are not legislating in the trust, or for the trust, or about the trust if you simply go about your own business of doing what the trustees thought you might be going to do. If Parliament simply chooses to say that another county, or borough, or half of a county, shall now become part of a Special Area in any one of 50 different ways so far as machinery is concerned, surely Parliament is at liberty to legislate like that, and the only thing that happens to the trust deed is that, when you construe it, the trust deed then applies to the wider areas in such trust deed. Surely that is not legislation that involves hybrid Bill procedure?

The Chairman: But for his closing words, I was going to say that the hon. and learned Member was quite correct. There is nothing to prevent Parliament from legislating in such a way as he suggests, but Parliament by its rules can only carry that legislation according to certain forms, and that would mean that this particular provision would have to go before the Examiners and would have to undergo the procedure of Private Bill legislation before it could be brought before a Committee of the House.

Mr. Pritt: Surely, you are ruling there, Sir Dennis, that, because somebody has made a trust deed, it becomes impossible for Parliament by its normal procedure to say that something else which was not a Special Area yesterday shall be a Special Area to-morrow. Surely, the mere extent of a trust deed cannot deprive us, according to our. Standing Orders, of the right to legislate by special Act. I know that we practically belong to the great financiers, but surely not to that extent.

The Chairman: Fortunately, what I have to do is, not to legislate in any way, but to give a Ruling on a particular case that is before me at the present moment; and, after the discussion that has taken place, there can be no doubt here that this would be a case which would have to be referred to the Examiners.

Mr. Pritt: Do I understand your Ruling to be that it is out of Order at any stage of this Bill for Parliament in any form to enact that anything shall become a Special Area which is not now a Special Area?

The Chairman: I think the hon. and learned Gentleman had better allow me to give my Ruling in my own words, which I have done.

8.16 a.m.

Sir S. Cripps: On the point of Order—it is an important point—may I bring this to your attention, Sir Dennis? Parliament is constantly now legislating about giving benefits to certain areas or certain trades or industries. There may be a great number of these interests, commercial and otherwise, which deal with those areas by reference to their definition in an Act of Parliament. It is merely a convenient way, in drafting documents, to refer to one of those areas of businesses and so on, and that has been very often adopted. If it is to be said that, if


Parliament alters the definition of any such area or industry, Parliament is interfering with private enterprise, and therefore hybrid Bill procedure must be adopted, we are, I venture to suggest, going to get into very great difficulties indeed in regard to this type of legislation. It may be that there have been people who have made wills in which they have left money to the inhabitants of the Special Areas, and we shall be faced with the position that we shall not be able to legislate about the Special Areas as regards their definition, because the persons who made the wills happened to choose the Parliamentary phrase "Special Area." I do ask that we should not be so fettered in the future, by a Ruling from the Chair, in what may become a very important matter indeed both as regards the Government and private liberties.

8.18 a.m.

The Chairman: The hon. and learned Member now enables me to draw more special attention to what I have already said, namely, that I am ruling on a particular case, and not giving a general Ruling which might be stretched beyond that to cover a number of other cases. Happily, I have the advantage over the hon. and learned Member that I am not only the advocate against him on the issue but I also have the power of deciding it. But, if I may say so, the reason for my Ruling in this particular case lies in this particular paragraph which it is proposed should be put in, and of which I, at any rate, could not understand the object or intention until I made inquiries. Directly I did, I found that it had not a general object or direction in reference to a numerous class of cases, but that it was directed to deal specifically with one particular private interest. In those circumstances it is quite clear that my Ruling would not apply to those cases which the hon. and learned Member mentioned.

8.20 a.m.

Mr. Parkinson: I beg to move, in page 3, to leave out lines 19 to 26.
I notice that, in moving the Second Reading of this Bill, the Minister of Labour did not give any explanation whatever on the point to which this Amendment relates. The Under-Secre-

tary of State for Scotland did try to some extent to cover the point. It is a point which is very vague indeed, and I think we have a right to know what this advisory committee means. First of all, it is provided that the Minister of Labour shall appoint an advisory committee to whom he may refer any representations made to him. I listened to the Second Reading speech of the Minister, and I did not hear any reference to this point. The Under-Secretary of State for Scotland in his speech made quite a number of references to the matter. He said in one place:
In considering claims for this form of assistance the Treasury will act on the advice of an Advisory Committee which will be appointed by them."—OFFICIAL REPORT, 6th April, 1937; col. 55, Vol. 322.]
If the Committee is appointed by the Treasury, that is all right, because the Treasury will have to find the money. But there is to be another Advisory Committee appointed by the Minister himself. I want to ask the Minister whether he will explain what is meant by this advisory Committee, of which the Under-Secretary said:
If the Committee recommend him to apply the Clause in the area in question he is not bound to accept their recommendations, but without a recommendation from the Committee he cannot direct that the Clause shall apply."— [OFFICIAL REPORT, 6th April, 1937; col. 55, Vol. 322.]
The Minister has power over any recommendation of the Committee, and, no matter how strong their recommendation may be, the Minister has power to veto it. Then the Under-Secretary went on to say:
The House will see that there are two separate Advisory Committees, one appointed by the Minister of Labour to advise him with regard to the claims of localities, and the other appointed by the Treasury to advise them as to the amount of assistance to be advanced."—[OFFICIAL REPORT, 6th April, 1937; col. 56, Vol. 322.]
And then the Under-Secretary said, I do not know whether it was humorously, that one of the Committees was to relieve the embarrassment of the Minister in making a choice. I do not know why the Minister should be embarrassed. The Under-Secretary says that the other Committee "restrains the parsimony of the Exchequer." The parsimony of the Exchequer in many directions is beyond doubt. I want some information regard-


ing the Committee we are dealing with in this Clause. This Committee deals with the certification of districts in which there has been severe unemployment and where assistance is needed.
What is to be the constitution of this Committee? Is the Committee to be composed entirely of men? Is it to be composed of local people in the area in which it is going to act? Will it be composed of people who know the psychology of the area? That would be better than a national committee. If a national committee is appointed, it would have to depend entirely upon what it was told by somebody else. If a Committee were appointed which understood the part of the country in which it operated, it would be able to exercise a greater influence on the Minister and give him better advice on the matter. I want the Minister to make it clear what is meant by this Committee, because the Committe is a very important one, and so long as it has to advise the Minister it has an important duty to perform. The Committee should be given the assistance which can be given to it without penalising the Nuffield Trust or any other. The Minister should deal fairly and squarely with the areas which become certified areas. I want to appeal to the Minister to consider seriously that the Committee should be appointed in connection with the area in which they are to work.

8.27 a.m.

Mr. Gordon Macdonald: We in Lancashire are rather pleased with this section of the Bill. We felt that Lancashire was getting some assistance under the Bill, but the lines we seek to delete created some suspicious. Referring to my own Division, we are quite satisfied with the three provisos laid down. But while we are satisfied we suspect the activities of the Committee. Since the position in Wigan will satisfy the conditions, we do not see why some Advisory Committee should examine the matter, and report to the Minister, and why it should be on their recommendation alone that these areas should receive assistance. We do not think that Lancashire has been treated fairly, but here is an opportunity for some areas to get some benefit. We have some doubts whether if these lines remain in the Bill they will not deprive us of the assistance we have needed sorely for many years.

8.30 a.m.

Mr. T. Smith: It may be convenient if I put a few questions to the Minister now, so that he can reply to them. I should like to ask whether this Sub-section (2) operates when the site company is set up and who initiates the site company. I represent a county in which there are a good many districts suffering from severe unemployment and when the Bill becomes law, they will wish to make applications under it. Take, for instance, Goole. which is suffering very considerably from unemployment. It is one of a number of districts which will possibly ask to be certified when this Bill becomes law. what I want to know is, will Goole be permitted to make representations if a site company has been set up? The second point is, who makes the representations? Will they be made by a local authority, and if made by a local authority, will it be an urban district and not a county council? The West Riding County Council would not be qualified, but if you take a number of urban districts within that county council area I think you will find their weight would warrant them in asking to be certified. I would like the Minister to make it clear whether this Sub-section deals only with site companies to be set up and, if so, how they are to be set up. Will he also define clearly what is the meaning of "an area" and who will have to make representations on its behalf?
With regard to the advisory committee, I am not so hopeful as my hon. Friend who spoke before me. If he expects that Lancashire will receive some considerable benefit from that Sub-section I am inclined to think he will be disappointed. This Sub-section has more alternatives than a cross-word puzzle. I hope the Minister will make these points perfectly clear.

8.35 a.m.

Mr. Shinwell: This Sub-section is the most complicated one in the Bill, and it is very necessary that the right hon. Gentleman should clear up the doubts which have been expressed. May I direct his attention to the first line of Sub-section (2)?

The Chairman: I was very nearly interrupting the hon. Member for Normanton (Mr. T. Smith) on this point. I do not want to go further at the moment than to warn the Committee that questions on the earlier part of Sub-section (2) must


come to the Question that the Clause stand part. We are now dealing only with the proviso.

Mr. Shinwell: I was merely directing attention to the words just mentioned for the purpose of illustrating the point I am going to make. If the Minister directs his attention to the beginning of the Subsection he will find the following words:
If the Minister of Labour upon representations made to him is satisfied.
If representations are to be made to the right hon. Gentleman presumably they will be from interested parties, that is to say, parties who are concerned about conditions in the area. Moreover, the Minister, upon representations made to him, must be satisfied regarding certain conditions. These conditions having been fulfilled, representations having been made and the Minister having satisfied himself regarding the conditions in the Sub-section, why should it be necessary to establish an advisory committee in order to acquaint the Minister with the facts of the case and advise him whether he should proceed? It seems to me that such a committee is redundant. The right hon. Gentleman may be able to convince me and my hon. Friends that there is a more substantial reason for the existence of such a committee, but I am bound to say that on reading the Subsection, and in particular the reference to the advisory committee, that it does not seem at the moment to be necessary.

8.38 a.m.

Mr. E. Brown: I will do what I can to deal with the points that have been raised on this question. The hon. Member for Ince (Mr. G. Macdonald) knows very well that representation were made to the Government in many ways during recent months. Some were from local authorities and some from Members of Parliament, and all kinds of suggestions were made. Most of them were concerned with extending the bounds of the Special Areas. Representations were made recently by Members from Lancashire who suggested that the best way to help their particular area would be by such a proposal as is laid down in this Clause—namely, to help those prepared to clear sites for factories to let them and to give financial assistance. That is the gist of the suggestion. It would have been possible to devise a

formula to cover all areas which had a certain percentage of unemployment, but hon. Members who have watched the operation of that kind of formula know that all kinds of hard cases immediately arise just outside it. Also, in a case of this kind, conditions change so much that an area may be inside the formula at one time and out of it again within six months arid we thought that the best and most flexible way, and the reasonable and commonsense test of an area, was to be found by laying down general terms under the three headings in the Clause.
Hon. Members have asked about the site companies. The initial proposals are with the locality; they will come from people in the area who are keen about it, and who think so highly of the local conditions that they desire to form a site company. The normal procedure will be that of a local development council, on which the local authorities are represented. Normally the initiative will come from such a council. Before assistance can be given there must be a reasonable prospect that a responsible and effective site company will be formed and that it will be able to get or to build the necessary factories.

Mr. Dunn: Would the Minister deal with the matter in the light of the Interpretation Clause, because it is coupled with what he is saying.

Mr. Brown: That gives the definition of a site company as:
any body corporate established for the purpose specified in subsection (1) of section five of this Act, being a body which does not trade for profit, or a body whereof the constitution forbids the payment of any interest or dividend at a rate exceeding such rate as may be for the time being prescribed by the Treasury.
That is what is normally known as a public utility organisation. Let us suppose that the arrangements are under way and people with local initiative desire to take advantage of the Act in order to get industries to come to their areas; they then have to satisfy the Minister that the area ought to be certified by him. The Minister has to make a decision, assisted by a competent national advisory committee which is to be set up. The committee will have the advice of men who are giving their minds to this problem alone, in the light of the local circumstances and the conditions laid


down in Clause 5. I cannot say anything about the composition of the committee until the Bill becomes law, except that it will consist of four members. There will be an independent Chairman, an employer, a trade unionist and one other member. We shall see that the interests of Scotland are not overlooked.

Mr. J. Griffiths: And Wales?

Mr. Brown: We will do our best there. That will be the procedure. Surely hon. Members will not want to deprive the areas who desire, after an impartial examination of that kind of work in the conditions of those areas, a general procedure in the light of conditions which are laid down, and which we shall discuss later. I was amused at the speech of the hon. Member for Westhoughton (Mr. Rhys Davies), because I should have thought that an advisory committee would appeal to him, especially when we remember speeches made by him in this House about the Minister setting up Government factories in particular areas and the idea that the Government had shown bias for some political reason. On practical grounds, and in order to assist those who want to do their best for their areas, I assure hon. Members that it is the best thing to have the advice of a committee.

Mr. Shinwell: The right hon. Gentleman has overlooked one point. The powers of the committee are somewhat arbitrary, and in no case can the Minister take the initiative. That seems to present a serious difficulty. The Minister may have sufficient knowledge and information, despite the advice of the committee, to justify proceeding with a scheme. Can he not conceive of circumstances of that kind arising? He has devised this part of the scheme in a most flexible fashion; if he has an Advisory Committee he must accept their advice from time to time, but there might be occasions when he might see fit to disregard it or to take the initiative himself.

Mr. Brown: Even if cases of that kind did arise, they would emphasise the importance of having things clearly understood and on a definite basis, so that the Minister can be fortified by an advisory committee of this kind. The hon. Gentleman must not overlook that the committee are required to consider any instructions

which the Minister may give them in considering the circumstances of an area. It does not mean that the Minister is required to lay down beforehand any conditions; that is not the intention. It is to enable the Minister to give instructions as to procedure and as to the factors which he wishes them to take particularly into account in considering the circumstances affecting each area. This answer meets the points made by several hon. Members, and I hope, after my explanation, that the Committee will agree to it without a Division. It is better to have a flexible machine of this kind. The matter is subject to legal interpretation, in the sense that the Minister is bound by it, but it is flexible to operate.

8.50 a.m.

Mr. Tinker: The Bill as it stands has caused us to be suspicious on this particular section. Let us see what it means. In the earlier part of the Clause certain conditions have to be agreed to, and after that we appoint an advisory committee which is to decide whether the area is to be helped or not. That appears to us to be altogether a delaying action. If the conditions are complied with surely the Minister should have power to decide? There is another and more serious point. I do not want to see the powers that ought to be given to Parliament passing away to somebody else. Here is an advisory committee which will determine what is to be done. The Minister will be bound by its decision. According to the Clause he must accept their decision, and when we say to him afterwards "Why is it that Widnes or Westhoughton or other parts of depressed Lancashire are not included in this," he will reply that the advisory committee was set up by Parliament and that he has no control over what is an independent body. If the advisory committee examines a case and decides that it canot be admitted, we have no chance at all to voice our opinions on the Floor of the House of Commons. I think the Minister would be well-advised not to press this part of the Clause. After all, it is we who are asking him to be an effective person. Only this week there has been a deputation from the Labour Party to examine conditions in Lancashire and I expect from their report that the Minister will see the necessity of something being done. When that information is laid before him, and when


he has satisfied himself that the case is sufficient for him, to admit, then, according to this Clause, the whole thing has to go to the advisory committee. I do not see any need at all for it, and because of that we are asking the Minister not to include it in the Bill.

8.53 a.m.

Mr. Pritt: I want the Minister to accept this Amendment for several reasons. I have been looking at the Clause very carefully and I cannot see how it can possibly be of any advantage to people seeking to have an area certified as he suggested. If the Minister wants to certify an area on the representations laid before him, let him do it openly. This Advisory Committee can never help him to do it. It can either agree with him, in which case he will do it, or it can disagree with him, in which case he will not; or they can veto it however earnestly the Minister wants it. If the Minister really finds it convenient to have the advisory committee I can well understand it, for it will be an advisory committee to whose advice he shall have regard, but for an important Minister in a problem like this to appoint an advisory committee with the sanction of Parliament is to provide him with one more excuse for doing nothing, when he ought to be doing something. The other objection is, will not all this slovenly procedure, if it is allowed to pass in the Bill, cripple the Act within a year or two? The Minister is given power to appoint the committee. He appoints four people; and having appointed them he cannot appoint any more. I know of no general legislation which gives him any additional power. Once he has appointed that committee he cannot ever get rid of them or accept their resignations. I presume he can disregard them after they are dead, but if one of them dies, are they still the advisory committee he appointed or are they only three-quarters of it? And when the four died or retired, he cannot appoint others under this legislation. I ask the Committee to say that the whole principle is wrong and that in any event the proceeding is disgraceful.

8.56 a.m.

Mr. Stephen: I support the Amendment and I ask the Minister to reconsider this matter. I suggest to him that there is no need for making statutory the

appointment of this committee, nor can I see any advantage in it. I can see that there are disadvantages. Suppose the Minister finds after he has appointed his statutory committee of four that the conditions in the district make the four people he has appointed not the people who should advise him with regard to that particular district? He will have got the committee composed, possibly, of individuals with very little knowledge of the district, whereas if he did not make the appointment of the committee a statutory obligation in this way, he might afterwards find that it would be a good thing to appoint committees in different parts of the country. He can do that without taking any such powers, and I submit that is a reasonable position. It will be observed that there are to be two committees one appointed by the Minister of Labour and the other a committee appointed by the Treasury. This Treasury committee will also make recommendations but as far as the advice on local situations is concerned, local individuals would probably do it more satisfactorily. There is one question I want to ask in connection with this proposed advisory committee. If we agree to its appointment, are its members going to be paid? If this Clause is going to be operated in any material way, I take it there will be plenty of work coming to the committee from various parts of the country.
I am wondering what trade unionist is going to be in a position to give all his time to the work of this Committee which is to advise the Minister. It may be possible to get individuals to do this, although as far as I can see they are going to be unpaid. They are not an expense in connection with the Bill, and it appears to me that if the Minister wants people to advise him there is no need for a statutory provision. I hope the Minister will reconsider the Clause because it appears to be quite unnecessary. With regard to the wording, it is provided that the Minister of Labour shall appoint an advisory committee to whom he may refer any representations made to him under this Section. He may, or he may not, refer them. He may consider that it is quite unnecessary, that they have not got a sufficiently good case. If they have a sufficiently good case it must be referred to the committee. Am I right in thinking that if they have a sufficiently good case


their application must be referred to the committee under this provision? I would like the Minister to inform the Committee if that is so. In that case the Minister is making a lot of trouble for himself in the future. Suppose his Department regards an application as not very substantial, and he does not send it to this committee, and there are various people in the district, employers and workpeople, who have become interested in the proposal they feel aggrieved. Their application does not go to the committee. There will be ever so much trouble and discontent caused in that way. I cannot see that the Minister is gaining anything by placing this fetter upon himself, and I cannot for the life of me see why the Minister should tie his hands in this way unless he is anxious to get machinery which can be blamed for any lack of action. Perhaps it is contemplated that somebody else will be the shock-absorber. It may be said that it is not very kindly to talk in this way, but I remember a previous experience in connection with trade facilities and in connection with a provision for dealing with unemployment. We were always told when we raised a question that the committee had gone into it but could not see their way to grant the request. Is the Minister here setting up similar machinery? If he wants advice he can get it from any individual without binding himself in this way, and I certainly feel that the Minister on reconsideration should come to the conclusion that this is quite unnecessary.

9.4 a.m.

Mr. Burke: I hope the Minister will accept this Amendment. It has been stated that it comes from Lancashire, and if I may hazard a guess I think it is true also to say that a good deal of this scheme comes from Lancashire. We are paying a tribute to the Minister in asking him to cut out the machinery of the advisory committee and it is not very often we are able to say that we have sufficient confidence in him and his energy to say that we do not need between him and his work some other body. There is an advisory committee for the Treasury which will slow things down to a very considerable extent, and we do not want anything to stand in the way of speed. There is to be a site company also. That I suppose will have to have some consideration in the matter. There is another reason why it is not necessary to have

an advisory committee. The Minister knows that in every one of the areas which will seek to be brought under the Bill there is a development council. There is, for instance, a development council in Lancashire. I think there is hardly a single area which might make representation to this body that has not got a development council, a thoroughly representative body of people knowing all about the area, and which can give the Minister all the particulars he wants. People outside Lancashire do not know everything about the problems of Lancashire. What is going to happen about this advisory committee of four persons? They are not going to be four persons drawn from Lancashire. It has already been indicated that one is going to come from Scotland. Some consideration must be given to Wales. I suppose there will be competition for the seat going vacant—the Chairman would, I suppose, be impartial. What likelihood is there that this committee of four persons, drawn from the four quarters of the country, will know as much about the needs of any one particular area as these local development councils themselves? We do suggest very seriously that the Minister should rely upon the advice of people in the localities, who understand and have been studying these problems for a very considerable time, rather than set up a committee which will only complicate the matter.

9.8 a.m.

Mr. Davidson: I would like to join in asking the Minister to reconsider setting up this advisory board. I would point out to the hon. Member who has just spoken that we have also in Scotland a Scottish Development Council representing all sections of industry and local council interests. The Minister knows perfectly well that the Scottish Development Council—I see the Secretary to the Treasury nodding in acquiescence—go very fully into affairs in Scotland, and can give all the advice and guidance that he requires with regard to Scottish questions. Apart from that, I am naturally suspicious, particularly after the House has only recently discussed a Bill increasing the salaries of Members of the Government, and now we find the right hon. Gentleman trying to push some of the work of his Department on to an unpaid advisory committee. I do not think the House can accept any such motion.
With regard to paragraphs (a), (b) and (c) I agree with the wording, because I feel that here is a definite opening for the distressed areas that are not scheduled as distressed areas, such as Glasgow, to have an opportunity for their case to be dealt with; but added to those paragraphs we have the provision which states that the Minister of Labour shall appoint an advisory committee, and I do not think my Scottish colleagues will agree that a national advisory committee on the lines indicated by the right hon. Gentleman could really get down to the poverty and distress problem of Scotland. I am suspicious of any barrier being formed between the local councils and the Minister of Labour himself, because I believe that, despite failures in the past, the continual pressure of local councils is more apt to have an effect on the Minister as an individual than it would have on an advisory committee acting under instructions from the Minister.
As the right hon. Gentleman knows, I have in my hand a complete and definite statement, concisely typewritten, of the distress of Glasgow, containing a plea for Glasgow to be scheduled as a Special Area. That has not been allowed, but here we have a definite statement which tells us of the 87,000 regular unemployed in the second city of the Empire, of the increase, since the present Government came into power, of over 1,000,000 on Poor Law relief in that city, of the 8,000 children in Glasgow receiving free meals as necessitous cases after medical examination, and of the 93,000 children, in an examination of 100,000, certified by medical officers as unfit, all in the second city of the Empire. This concise statement also shows that Glasgow pays 2s. 8d. in the pound as compared with 7d. or 8d. paid by scheduled distressed areas, and that Glasgow is carrying a burden of unemployment and Poor Law relief that amounts to 1,408 per ro,000 persons, the highest rate of any city in the Empire. The right hon. Gentleman asks the House to say that a committee of four shall be appointed, made up of trade unionists, an independent legal gentleman—I suppose we must always have a lawyer—and some other person representing the employers, and that the local authorities shall go to this committee and lay their case before them. This committee, acting on instructions from the

Minister, will say what they think ought to be done, and the Minister, in the final analyses, will have the right to say whether or not it shall be done. This is merely a roundabout to get away from the responsibility of the Minister's own problem.
I ask the right hon. Gentleman to accept the Amendment, which is a business Amendment. It means that the right hon. Gentleman's Department will deal with the problems that apply to that Department, and that we shall not put them on to the shoulders of people who cannot understand the problems. I am glad to see the right hon. Gentleman the Secretary of State for War here, because I would point out that if the Minister of Labour forms any more advisory committees, we shall have recommendations pouring into the Government that will completely swamp the Government, different recommendations that the people in the country will not understand and that will be liable to lead to riots in the Special Areas, and the Secretary of State for War will then have to provide the soldiers to quell the riots. It is a dangerous principle to set up all these committees, and I ask the right hon. Gentleman to act like a Scotsman, like a man, and to accept his own responsibility.

9.17 a.m.

Mr. Jenkins: The recommendations in this Clause seem to me to be so definite that the Minister does not need to get the advice of a committee. The right hon. Gentleman will have very considerable difficulty in appointing a committee that will be representative of the Special Areas. We have four Special Areas—Durham, Scotland, Cumberland. and Wales. If I understood the Minister aright, he said he would appoint an independent chairman and three other members of the committee. One will be a representative of the trade unions, one will represent the employers, and one will be a Scotsman.

Mr. E. Brown: I said that there would be representation on the committee for Scotland.

Mr. Jenkins: It may he that the Lord President of the Council will be the independent member of the committee, but, seriously, this is an attempt on the part of the Minister to set up a shock-absorber between his critics in the country and himself.
The Clause states:
Provided that the Minister of Labour shall appoint an Advisory Committee to whom he may refer any representations made to him under this section, and shall not direct that this section shall apply to any area unless the committee after considering, in accordance with any instructions given by him, the circumstances affecting the area, recommend that this section should apply to the area.
Clearly that is too absurd to be embodied in this Bill, and, after all, the conditions of scheduling an area are simply stated and were stated by the Chancellor of the Exchequer a considerable time ago in this House. They are set out here:
that there is, and has been for a considerable time, severe unemployment in the area …
that employment in the area is mainly dependent on one or more industries which are unable to provide sufficient employment. …
There is no committee more capable of deciding those issues than the Minister himself and his Department. He has all the information necesary for making those decisions. If a committee is set up on which there is not adequate representation of every area, difficulties will obviously arise. We have had experience of other committees set up under Special Areas Act, such as the committee for allocation of the trading estate. It has been a case of "pull devil, pull baker" with the members of the committee respecting certain areas: Areas with strong claims, have made representations and difficulties have arisen and difficulties would arise for this committee also. The Minister is handing over to the committee powers and responsibilities which he ought to retain. If the Amendment is not carried and if the committee is set up, then, clearly, each of the Special Areas should have adequate representation. I say without hesitation, that there will be considerable public agitation in Wales if Wales is left without representation. I am opposed to the setting up of such a committee, which will be a buffer between the Minister and criticism but if it is set up, there should be adequate representation for various areas.

9.22 a.m.

Miss Lloyd George: The hon. Member for Pontypool (Mr. Jenkins) said he understood from the Minister that the independent member of the advisory committee would be a Scotsman. The Minister thereupon denied that and said that Scotland would be represented. I

am sure the Secretary of State for Scotland would agree that only a Scotsman can represent Scotsmen. He would not be prepared to place the interests of Scotland in the hands of some Anglo-Saxon and on the same analogy, he would agree that only a Welshman can adequately represent Welsh interests. The Minister said it might be difficult to find a Welshman able to represent both my hon. friends from South Wales and myself. I do not think there would be any difficulty. That is the bogy always put up by Ministers who want to deny representation to Wales. The Minister himself has repeatedly emphasised how greatly the problem in South Wales differs from the problem elsewhere. On his own showing, therefore, it is vital to have someone who will represent the interests of Wales. I do not suggest that South Wales or North Wales or my own distressed area of Holyhead, will not be given fair treatment at the hands of the Committee but I say, emphatically, that Wales has not, up to now, had its fair share of the benefits, small as they are, which have been available. I therefore urge the Minister not to be content with saying that he will do his best to see that Wales is represented but to give an undertaking, as in the case of Scotland, that Wales will be represented on the Committee.

9.25 a.m.

Mr. E. Brown: I was not attempting to draw any distinction between North and South Wales but between the districts which are outside and those which are inside the Special Areas. I allowed myself, perhaps, to use an incautious phrase when I referred to the representation of Scotland, but I assure hon. Members that Wales will not be overlooked. I only mentioned Scotland because there is a Commissioner for Scotland and a Commissioner for England and Wales and I wanted to make it clear that on the advisory committee there would be a Scottish representative. There is no point in the forcible speech made by the hon. and learned Member for North Hammer-smith (Mr. Pritt). He drew an almost horrifying picture of what might happen in the case of the death of members of the committee. If the Minister of Labour desires to appoint 5 or 6 or 8 or 10 members, he can do so, but I have chosen the alternative of the smaller body, in order to make sure that the fear expressed


by the hon. Member for Leigh (Mr. Tinker)—which I know is sincerely felt—that this would prove to be a delaying body, may not be justified. It will not be a delaying body but a working body and it will facilitate the operation of this part of the Measure, just as the admirable advisory committee in the Overseas Trade Department facilitates the work of export credits. It is possible, for instance, for the Minister to get representations from four or five different localities in the same area and he may desire to have advice upon the best method of procedure in the interest of the localities and of the area as a whole. I am grateful for the confidence shown in me by hon. Members opposite who suggest that this committee should not be set up, but I beg of them to accept my judgment in this matter and to give me my advisory committee.

Mr. Pritt: Suppose that within three months after the appointment of the committee two of them die and two of them resign. How then, under this Clause, can the business be carried on?

9.28 a.m.

Mr. M. MacMillan: Every area, whatever the Minister calls it, is a Special Area in this respect, that each has its own special local features—geographical, economic, industrial and otherwise. The special features of areas must be known best to local people who are acquainted with local conditions. Under our National Scottish Development Council a special sub-committee was formed of people representative of and knowing the Western Isles to get best possible information on the spot and to convey it indirectly to the Secretary of State for Scotland. I was sorry that any sort of National Council should come between that local advisory committee of the people on the islands and the Minister directly responsible for the development of the islands. Only a few weeks ago we were discussing a similar matter to this under the special powers Bill for the taking over to public control of piers and harbours and I advocated nationalisation as part of the transport system of the country. The Secretary of State mentioned then that the local people were bound to know much better than the Minister what the local conditions were with regard to harbours and piers. I agree that they do

and much better than any body of people or a Minister representing so many other interests. Let us then apply the Secretary of State's own argument now.
In going through the Highland Areas you cannot get full information at first hand on many matters affecting the people of some localities unless you are able to speak their language. You will not, as an official and a stranger, get them to commit themselves in regard to local conditions, but when you have direct knowledge of the people as their representative you can get the information from them much more frankly than could any stranger going into the area. I believe that that is true of dialect Lancashire, and it is bound to apply still more to Wales. The Secretary of State for Dominions Affairs, for example, represents part of the Highlands not because he knows them but because they do not know him. A local advisory committee of people elected by the district would be far more effective than any body of strangers, however impartial and well selected. We have no pledge or guarantee in the Clause that the Minister will be satisfied by any representations. It is difficult to establish a standard of satisfaction for areas, in each of which the conditions differ from the last and the next. The same person dealing with them, in this case the Minister, cannot possibly bring to bear in each case a full knowledge of local conditions. The problem demands something more than the Minister of Labour or even the Secretary of State for Scotland can be expected to give. If the Minister is not satisfied, a difficult position arises. He must be satisfied according to a standard of his own. He is not compelled to make any recommendations at all.

The Deputy-Chairman: The hon. Gentleman is now getting away from the argument and is speaking on the Question, "that the Clause stand part of the Bill."

Mr. MacMillan: I am sorry if you think I got away from the argument. I was trying on this Clause to deal with the functions of the Advisory Committee. The Minister is apparently to be bound by their advice. In the first place, they have to receive and to deal with any representations which the Minister chooses to make, but there is no guarantee that


the Minister will place before the Committee the representations made to him by the people on the spot. The Committee will only have referred to them representations which the Minister may pick out from those which are given to him locally, as he sees fit. Yet the Committee have to act in accordance with instructions given to them by the Minister. Apparently the Committee are faced with the contradiction of having power to bind the Minister and, at the

same time, having their power limited by such representations and instructions as the Minister sees fit to make to them. We are not satisfied that the Minister has cleared up that contradiction, although he tried to do so.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 117; Noes, 49.

Division No. 158.]
AYES.
[9.37 a.m.


Adams, S. V. T. (Leeds, W.)
Elliot, Rt. Hon. W. E.
Peake, O.


Agnew, Lieut.-Comdr. P. G.
Elliston, Capt. G. S.
Peat, C. U.


Allen, Lt.-Col. J, Sandeman (B'kn'hd)
Emery, J. F.
Penny, Sir G.


Assheton, R.
Emrys-Evans, P. V.
Perkins, W. R. D.


Baldwin-Webb, Col. J.
Evans, Capt. A. (Cardiff, S.)
Peters, Dr. S. J.


Balniel, Lord
Findlay, Sir E.
Plugge, Capt. L. F.


Barclay-Harvey, Sir C. M.
Fox, Sir G. W. G.
Procter, Major H. A.


Baxter, A. Beverley
Fyfe, D. P. M.
Raikes, H. V. A. M.


Beaumont, Hon. R. E. B. (Portsm'h)
Gibson, C. G. (Pudsey and Otley)
Ramsbotham, H.


Beit, Sir A. L.
Goldie, N. B.
Rankin, Sir R.


Blindell, Sir J.
Grant-Ferris, R.
Rathbone, J. R. (Bodmin)


Boulton, W. W.
Grimston, R. V.
Robinson, J. R. (Blackpool)


Bowater, Col. Sir T. Vansittart
Guinness, T. L. E. B.
Ropner, Colonel L,


Bower, Comdr. R. T.
Gunston, Capt. D. W.
Ross Taylor, W. (Woodbridge)


Bowyer, Capt. Sir G. E. W.
Hamilton, Sir G. C.
Samuel, M. R. A.


Bracken, B.
Hannon, Sir P. J. H.
Sanderson, Sir F. B.


Braithwaite, Major A. N.
Haslam, H. C. (Horncastle)
Savery, Sir Servington


Brass, Sir W.
Haslam, Sir J. (Bolton)
Scott, Lord William


Brown, Rt. Hon. E. (Leith)
Heilgers, Captain F. F. A.
Shakespeare, G. H.


Bull, B. B.
Holmes, J. S.
Shaw, Major P. S. (Wavertree)


Bullock, Capt. M.
Hope, Captain Hon. A. O. J.
Stuart, Hon. J. (Moray and Nairn)


Cartland, J. R. H.
Hopkinson, A.
Sutcliffe, H.


Cary, R. A.
Horsbrugh, Florence
Tate, Mavis C.


Castlereagh, Viscount
Hudson, Capt. A. U. M. (Hack., N.)
Taylor, Vice-Adm. E. A. (Padd., S.)


Channon, H.
Hudson, R. S. (Southport)
Touche, G. C.


Chorlton, A. E. L.
James, Wing-Commander A. W. H.
Tryon, Major Rt. Hon. G. C.


Cobb, Captain E. C. (Preston)
Jarvis, Sir J. J.
Wakefield, W. W.


Colville, Lt.-Col. Rt. Hon. D. J.
Joel, D. J. B.
Ward, Lieut.-Col. Sir A. L. (Hull)


Cooke, J. D. (Hammersmith, S.)
Kerr, J. Graham (Scottish Univs.)
Ward, Irene M. B. (Wallsend)


Cooper, Rt. Hn. A. Duff (W'st'r S.G'gs)
Law, R. K. (Hull, S.W.)
Warrender, Sir V.


Cranborne, Viscount
Loftus, P. C.
Waterhouse, Captain C.


Craven-Ellis, W.
Lyons, A. M.
Watt, G. S. H.


Crooke, J. S.
MacAndrew, Colonel Sir C. G.
Williams, H. G. (Croydon, S.)


Crookshank, Capt. H. F. C
MacDonald, Rt. Hon. M. (Ross)
Wilson, Lt.-Col. Sir A. T. (Hitchin)


Davies, Major Sir G. F. (Yeovil)
McKie, J. H.
Withers, Sir J. J.


Dorman-Smith, Major R. H.
Margesson, Capt. Rt. Hon. H. D. R.
Wood, Rt. Hon. Sir Kingsley


Dower, Capt. A. V. G.
Mayhew, Lt.-Col. J.



Dugdale, Major T, L.
Mellor, Sir J. S. P. (Tamworth)
TELLERS FOR THE AYES.—


Duncan, J. A. L.
Mills, Major J. D. (New Forest)
Commander Southby and Lieut.-


Eastwood, J. F.
Moreing, A. C.
Colonel Llewellin.


Eckersley, P. T.
Ormsby-Gore, Rt. Hon. W. G. A.





NOES.


Acland, R. T, D. (Barnstaple)
Harris, Sir P. A.
Pritt, D. N.


Adams, D. (Consett)
Henderson, J. (Ardwick)
Quibell, D. J. K.


Adamson, W. M.
Jagger, J.
Ritson, J.


Barr, J.
Jenkins, A. (Pontypool)
Seely, Sir H. M.


Batey, J.
Jenkins, Sir W. (Neath)
Shinwell, E.


Brown, C. (Mansfield)
Jones, A. C. (Shipley)
Smith, E. (Stoke)


Burke, W. A.
Kelly, W. T.
Smith, T. (Normanton)


Daggar, G.
Lawson, J. J.
Stephen, C.


Davidson, J. J. (Maryhill)
Leslie, J. R.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Dobbie, W.
Lunn, W.
Taylor, R. J. (Morpeth)


Dunn, E. (Rother Valley)
Macdonald, G. (Ince)
Tinker, J. J.


Ede, J. C.
McEntee, V. La T.
White, H. Graham


Edwards, Sir C. (Bedwellty)
McGhee, H. G.
Windsor, W. (Hull, C.)


Frankel, D.
Macmillan, H. (Stockton-on-Tees)
Woods, G. S. (Finsbury)


George, Megan Lloyd (Anglesey)
MacMillan, M. (Western Isles)



Griffith, F. Kingsley (M'ddl'sbro, W.)
Maxton, J.
TELLERS FOR THE NOES.—


Griffiths, J. (Llanelly)
Parkinson, J. A.
Mr. Groves and Mr. Mathers.


Hall, J. H. (Whitechapel)
Potts, J.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

9.45 a.m.

Mr. Shinwell: If there is any justification for the criticism levelled against this Bill, and in particular this Clause, it is the mystification in the Clause itself. It is full of qualifications. It begins with "ifs," and proceeds to "ands" and "mays," and is conditioned in almost every line. The primary purpose of the Bill was to afford relief to the Special and other areas by promoting new industrial enterprises. That need was emphasized by the Commissioner, and we might have expected, in the circumstances, that the Government, instead of promoting what is a permissive measure, would have made the promotion of industrial enterprises obligatory on themselves. I invite attention to what the Commissioner has said:
Industry is not seeking the Special Areas therefore it must be attracted to those districts of the Areas which are endowed with suitable economic facilities, and many are available. How can this be effected? My recommendation is that by means of State-provided inducements a determined attempt should be made to attract industrialists to Special Areas.
Where is the determination, as expressed by the Commissioner, in the Clause under review? I can best deal with this matter by taking the Clause line by line. It begins,
If a site-company is incorporated for the purpose of providing factories in any area.
There is no obligation at all, and yet this is the governing Clause with regard to the promotion of new industrial enterprises. The Treasury may or may not provide the finance, and the Government may or may not take steps to promote these enterprises. Further, the Clause says that "the Treasury may"—not shall, or must—and even that qualification is further conditioned by the succeeding phrase which says
in accordance with recommendation of an advisory committee appointed by them.
The Advisory Committee, as we have seen, is not to advise the Minister so much as to instruct him. The Committee has, in fact, arbitrary powers. These are the conditions and qualifications in the first few lines of the Clause, and I will direction attention to Sub-section (2) of the Clause:
If the Minister of Labour, upon representations made to him.…

There is no reason why representations should be made to him unless he himself takes the initiative. There may be an area, Special or otherwise, where no representations may be made to him from any recognised authority, and there is no reason to believe that the Minister must take cognisance of any representations made by individuals. It goes on:
… is satisfied as respects any area, not being or forming part of a special area— that there is, and has been for a considerable time, severe unemployment in the area.
Here I would digress to ask the right hon. Gentleman what he means by "severe unemployment." Is there any arithmetical calculation to guide him or the committee in coming to a conclusion? Then it says:
… unless financial assistance is provided under this section to a site-company which will operate in the area, there will be no immediate likelihood of a substantial increase in employment in the area.
There may be an area where there has been or is a munitions establishment which is providing a considerable measure of employment for the people in that area. Do we understand that in those conditions there is no obligation either on the advisory committee or the Minister to provide means of employment for persons who may be unemployed? That is my reading of the Clause, and I should like the right hon. Gentleman to address himself to that consideration. Now I come to the third paragraph:
that employment in the area is mainly dependent on one or more industries which are unable to provide sufficient employment by reason of general depression in those industries.
There is a further condition in the first two lines of that paragraph, where reference is made to dependence on one or more industries which is a very important condition, having regard to the fact that the Sub-section applies to any area not being or forming part of a Special Area. It might apply to any area in the region of Lancashire, where there is a considerable measure of unemployment but a very large number of industrial establishments and industries. Moreover, I should like the right hon. Gentleman to advise the Committee what is meant by the condition in the words:
by reason of general depression in those industries.
What is meant by "general depression"? Are we to understand that there


must have been this so-called severe unemployment over a prolonged period, and if that is what is meant, we are entitled to ask the right hon. Gentleman to define more clearly what is meant by "severe unemployment" and also to state categorically how long the unemployment must have existed before an area comes within the provision for the appointment of an advisory committee. Here again we have another qualification which seriously limits the proposals in the Clause, and having regard to these considerations, I submit that there appears in this Clause no determination on the part of the Government to establish these new industrial enterprises. I claim that I am not speaking ungenerously when I say that if it were otherwise, the Government would have been much more specific in their declarations in this Clause. There would have been no need to speak of "if" or "may," and, last but not least, there would have been no reason to leave the matter almost exclusively in the determination of an advisory committee.
I hesitate to accuse the Government of deceiving the Committee, much less of deceiving the country or of deceiving those who are so badly affected in the Special Areas, but my reading of this Clause justifies the suspicions which I have mentioned. I hope the right hon. Gentleman will be able to disabuse my mind of these suspicions. It would be grossly unfair if the Government played fast and loose with these poor persons in the Special Areas who are looking to the Government in this Measure for some modicum of relief. I do not put the case higher than that. I choose no words in regard to which I may be accused of indulging in sentiment or of appealing to the emotional instincts of hon. Members. I am concerned, I think impartially, with the administration of the facts recorded in this Clause. I wish it were otherwise, because I submit, as indeed the Commissioner has himself recommended and as has so often been urged by Members in all quarters of the House, that the essential need, in order to deal adequately with this problem, is to establish as soon as may be new industrial enterprises in the Special Areas and other areas. That being so, I beg the right hon. Gentleman on this Clause at all events, to reassure me and my hon. Friends that that much is intended in this Clause than appears on the surface.

10.1 a.m.

Mr. Maxton: I support the hon. Member for Seaham (Mr. Shinwell) in his opposition to this Clause, but I hope my opposition to it will not turn him into a supporter of it. I feel that everything he said in criticism of this Clause is more than justified. My hon. Friends nave never been enthusiastic about this sort of legislation. We have always taken the view that it is our duty to see that the people in the Special Areas have an income and that capitalism looks after the industries there as long as the system continues. This Bill was dragged out of the Government as a result of very widespread demands in the House and in the country. It seems to me that this Clause demonstrates that the Government deliberately framed a Bill that would create the impression in the Special Areas and among hon. Members that the Government were doing something, whereas, in fact, the Bill is nothing but a sham. It is obvious that all the Bill, and this Clause in particular, does is to offer inducements to private individuals to go to those areas and carry on business there. If the inducements offered do not attract anybody, nothing will happen, and the Special Areas will be exactly where they were. There is no governmental power to compel anything. Certain bribes are offered, and if those bribes are insufficient to attract people, the Bill is only a piece of paper.
If a site company is formed, who will be inerested in it? In these days, when a profitable use can be made of capital in places where there are factories and machinery already, who is going to waste time waiting while a site company is incorporated, sites prepared, factories built, and the Treasury decides what fraction of financial support it will give? Let hon. Members note that it is always a question of a minority fraction. The Government never puts itself into the position of being a senior partner at any stage of the Bill; the Government is always the junior partner, without powers of initiative or control, and without powers of drive.
The Government are depending upon the Commissioner to give life and vitality to these vague generalities and aspirations. I knew the Commissioner very well when he was a Member of the House. He was a genial colleague to work with when I was in the same party as he was, and he was not a bad opponent


to deal with when he was in another party; but does anybody who knew him intimately think that he is the man who will put life and movement, body and soul into this Clause? Nobody who knew the Commissioner personally will say that he is the type of man who can make this go in spite of all the difficulties and handicaps that are placed on him and the complete lack of real governmental force behind him.
The Minister referred to advisory committees, and I think he was most unfortunate in his example—the Export Credits Advisory Committee. Hon. Members who were in the House at the time when export credits were a more vital Parliamentary issue than they have been in recent years will remember how, week after week and month after month, we tried to start our trade with Russia. If I remember rightly, the right hon. Gentleman the Minister of Labour was at that time on these Benches in opposition, and took part in the questioning and cross-questioning on the matter. Questions were put to the Secretary of the Overseas Trade Department about the development of trade with Russia and the provision of export credits, and the responsibility was always put on to the Advisory Committee.
That is an illustration of one type of advisory committee—the advisory committee which blocks, and which is always put forward as an excuse for the Minister not doing anything. In such cases the Minister always says, "The matter is out of my hands and in the hands of a very responsible advisory committee, composed of some of the most experienced men in this country, and it would be quite improper for me, after having appointed these gentlemen and asked them to devote their time to this task, to interfere in their work. There have been so many applications to the advisory committee that it will be months before all of them can be dealt with."
The other type is the advisory committee that is a dead letter. I do not know how many dead-letter advisory committees there are in existence at the present time, but I know that often in Scotland and on train journeys I meet some public person who says to me, "Did you see that I was put on the advisory committee for so and so?" His name has been in the newspapers and

he is awfully pleased. I reply, "Oh yes, I am very pleased indeed; I think you will be a most valuable member." Then about two years later, I meet him again and say, "How are you getting on?" and he replies, "We have not met yet; we are still waiting to be summoned; I don't think there is much doing in our line just now." Those are the two sorts —the obstructionist advisory committees which stand in the way of progress, and the advisory committees that are not there at all.
I cannot see how the advisory committee provided for in Clause 5 can function. I cannot conceive four men doing the job of advising about whether an area should be included or not. I noticed the Welsh Members jumping to their feet to demand that a Welshman should be put on the committee just because the Minister happened to mention that there was to be a Scotsman on it. As far as I am concerned he can appoint four Welshmen, but he will not get me to agree that, because there is one Scotsman on the advisory committee that will turn it from a nothing into a reality.

Mr. Pritt: It is a great proof of English common sense that no one demanded that there should be an Englishman on it.

Mr. Maxton: The assumption all along has been that there are to be three Englishmen to start it. It is a "do-nothing" committee and I think I could pick three who would do extraordinarily well on it and they would not all be English. If it were a working committee, if there was reality in it, if it was a committee to advise the hon. Member for the Western Isles (Mr. M. Macmillan), for example, I could understand it. But it is to be a spare time, voluntary unpaid, committee. Imagine this voluntary committee going up to the Western Isles, or to Orkney and Shetland. To go once to the Western Isles is an experience. To go twice is a punishment. But to go to the Western Isles one day and then up to Lerwick and then down to Anglesey and South Wales and then into Lancashire and Yorkshire—what spare time unpaid voluntary committee will do anything of the kind? I know what they will do. They will meet once a month at the Ministry of Labour and a junior official of the Ministry will be there. They will say to him, "What are we going to do about this," and he


will say, "My recommendation is so and so," and they will say, "Right," and go off to lunch.
That is an advisory committee in practice and that is what the Government are doing for the Special Areas. They are shuffling out of the responsibility. This is an empty Bill, based on the idea that you can work in these areas some sort of bastard combination of private enterprise and State enterprise with the State always as the junior partner. Such a partnership cannot work. One has heard the saying that a half-caste has the vices of both races and the virtues of neither. I do not believe that but if there is any progeny or alliance to which I refer, it will have neither the virtues of public enterprise, nor the virtues of private enterprise, but the vices of both. I am satisfied that no scheme of that sort is going to bring vitality and hope to these areas. To do that something fundamental is required. The Government will have to show that it is prepared to shoulder its responsibility. Here we have a dodging of responsibility on the part of the Government and the Minister and everybody involved. The whole thing is foredoomed to failure. I trust I have not said too much and I hope that the hon. Member who is leading the Opposition at the moment will go into the Division Lobby on this question.

10.16 a.m.

Mr. Acland: I agree with the criticism levelled against this Clause on the ground that it is inadequate. Nevertheless, I desire to ask the Minister some questions about it, because although it seems capable of doing little, yet it may do something and I want to know how to get the best out of it. My first question is as to the size of areas. Does the Minister contemplate any limit of smallness in the case of these areas. If there is a very small area which satisfies all the conditions, will it be disqualified on the ground of size? My second question relates to the condition of being "mainly dependent" on one or two industries. Suppose there are no industries whatever in an area on which it can be said to be mainly dependent? Will it be disqualified because of some very little industries which are in that area and are languishing there although they are generally prosperous industries? For example, suppose the case of a town in which there are 1,000 workers. There is a shirt

factory employing 10 people, a bottle-making factory employing five people and a glove-making factory employing 20 people. Will it be said that because of the existence of those three little factories and because those three industries are not generally depressed, therefore, that area must be wiped out of consideration?
As to the people who are to take the initiative in making this Clause work, if it works at all, it seems to me that they are likely to be in many cases semi-philanthropic people, people who will say, "For the sake of our area, we will get something going if we can obtain Government assistance under this Clause." Suppose that A. B. C. and D. decide to do that, will it be possible for A. B. and C. to form themselves into a site company and then for B. C. and D. to form themselves into the undertaking which is to lease the factory or factories provided by the site company? Could that be done openly and above board and with the approval of the Minister, or must we find one group of philanthropists to form a site company and a separate group of people to run the undertaking? Finally, I wish to know whether there is any provision as to the rate of interest which the Treasury will charge on the loans which it gives? I put those questions to the Minister, but as I have to address a meeting later to-day in Cornwall, I am afraid I shall have to read the right hon. Gentleman's replies in the OFFICIAL REPORT.

10.20 a.m.

Mr. M. MacMillan: I am going to quote the words of somebody who seems to be listened to in this House with a great deal more respect than some of us, I refer to Herr Hitler.

Mr. Maxton: He has got the guns.

Mr. J. Griffiths: He has not got an advisory Committee.

Mr. MacMillan: In his book, "Mein Kampf," Herr Hitler speaking, I think, of the depressed classes of Germany, wrote:
The restoration of the rights of these people is not a question of bestowing charity but a question of restoring rights.
That is what we are asking for on behalf of the people of the Highlands and Islands. They have had their rights taken away from them for generations by the very class whom the Government represent to this


day. The Highlands of Scotland are more of a special and distressed area than any other part of Scotland. In this Bill we have what we might call a sheaf of "if's." There is one "if" after another, with the inevitable and occasional "but" which usually offsets any value under "if." We read that:
If the Minister is satisfied that there has been for a considerable time severe unemployment in the area,
something may or may not be done. We could usually say "may but will not be done," in the case of the present Government.
For a considerable time there has been severe unemployment in the area to which I have referred and which covers one-fifth of Great Britain. It is chiefly an agricultural area, with certain local industries and one national industry, the fishing industry. So considerable is the time during which this condition of severe unemployment has lasted that while Lancashire and other Special Areas are still waiting for jobs, people in our part of the country, which waited for jobs during generations and found that the jobs did not come, are leaving the area in a state of despair which the Government are doing nothing to alleviate. That first condition as to "severe" unemployment is all too easily satisfied by this area. It has a history of generations of severe unemployment. This cannot be controverted or denied. It is so severe that nearly 4,000 people have been leaving the area every year. They leave behind unemployment which is unassisted by Government and, without prospects here, they go to other countries beyond the bounds of the British Empire, or in some more hopeful régime within the Empire, where there might be opportunity for self-development and work and hope for their families.
There is the further promise that, if,
unless financial assistance is provided under this section to a site-company which will operate in the area, there will be no immediate likelihood of a substantial increase in employment in the area ….
the Government may come in and assist. The Secretary of State, the Government and we all, know that there is no immediate likelihood of a substantial increase in employment in the Highlands and Islands of Scotland to-day, unless some Government action is taken. The hon. Member for Bridgeton (Mr. Maxton)

referred to the Government as always having been the junior partner in any undertaking in which they entered. I should say that the Secretary of State for Scotland has been the sleeping partner. Those two conditions of the Clause have been far more than satisfied. If the Minister is satisfied that our people have suffered enough, he should bring forward some suggestion and some practicable scheme to alleviate as soon as possible the unemployment and neglect of areas for the relief of which this Government, for the past six years, have had the best opportunity that any Government ever had.
The third condition, which is satisfied by many parts of the area is:
that employment in the area is mainly dependent on one or more industries which are unable to provide sufficient employment by reason of general depression in those industries.
The Secretary of State for Scotland ought to know very well that the Highlands and Islands are dependent upon industries which are in decline because they are unassisted by the Government. He knows that the fishing industry is regarded as essential in time of war, when the Government can use it for their own convenience, and that that industry has been neglected. The people in the Highlands can give ample proof. The conditions in which they live tell their own story. The amount of money which goes into the Highlands depends upon the fishing industry, but the money which now goes into that district comes from public assistance, poor law relief and unemployment insurance benefit. The position must be faced by the Minister of Labour and the Secretary of State for Scotland. The poverty of the county councils is due to the fact that they cannot impose high rates. All these facts, which ought to be faced, are being neglected or ignored. Hon. Members should bear in mind that, behind these facts, we are dealing with human beings who occupy one-fifth of the area of this country.

Mr. Granville Gibson: If the hon. Member is so keen about unemployment in the Highlands why did his party vote against the Caledonian Power Bill which would have given employment in the Highlands of Scotland?

Mr. MacMillan: I voted for it and so did most of the Scottish Members of this party. I voted for the consideration of


that Bill in Committee in order that the full facts of the possibilities of hydro-electrical development could be considered. Let me make it clear once more that I was advocating examination for the sake of the Highlands and not at all on behalf of the private promoters of the Bill. I hoped that the Government, seeing this possibility of hydro-electrical development in the north, would have given it their blessing and developed it as a State enterprise unmixed with private capitalism. We have the words of the Lord President of the Council, who calls himself a Highlander, over the radio the other day, when he unofficially, but sincerely, said that the industrialisation of this area was inevitable to some extent, with full regard to the Highland scene and the preservation of Highland amenities.
Nevertheless, we must develop, as far as possible, along the natural lines of Highland life. We must develop the natural resources of the north of Scotland and industrialise it to some extent. If there were a progressive land policy in the Highlands and a properly developed fishing industry, the question of industrialisation would not be so acute. Because, however, of the neglect of those industries, we must go in for something else like power schemes and invite companies to come into the Highlands. The Lord President has blessed it, although unofficially, and now we want the official blessing of the Government. We want the blessing of the Minister of Labour, and we could get it under this Bill. We want also the blessing of the Secretary of State, and we would give him a blessing in exchange. All the conditions in the Bill are fully satisfied, and if the Ministers are not prepared to face the facts, let them get out and make way for someone who will.

10.34. a.m.

Mr. Adamson: The position under this Clause is so qualified and so permissive that it is impossible to conceive how it can be operated with any effect in assisting other areas. It is laid down in the qualifications that any district can be included under this Clause, as for instance, places where one or two principal industries only are affected and where it is possible for development to be made in secondary or small industries. The problem of these districts may vary in a large degree. In the outer ring of the

industrial Midlands it is conceivable that, within a few miles of Birmingham, there may be areas that would qualify as Special Areas for the purpose of the development of new industries. The problems of those areas differ according to the character of the district. The area round the centre of the Midlands has, in the main been dependent for generations upon coal-mining. There has never been any encouragement by the Government or any desire by industrialists to develop industries of a different character in those areas. The result is that younger persons and women who desire some other occupation than mining have to travel many miles to get work. There is a recognition in this Bill—but it is only a recognition— that industries should be established in such areas. They are dependent on the establishment of a site company, and that in turn is dependent on the goodwill of the Treasury. The application of this Clause to an area is, again, dependent on the stipulations laid down in three paragraphs. Finally there has to be the procedure of an Advisory Committee which advises the Minister whether such industries should be included.
I was hopeful that the Government, in facing this problem, would have taken their courage in both hands and would have taken some State responsibility, not merely for the planning of industry in those districts, but for seeing that they would be operated in the interests of the districts and of the nation as a whole. However, even under the Bill as it is, while we may accept it in the circumstances, we would have hoped that at least the recommendations and qualifications laid down would have been such as would have given us some hope that we would want to operate it in the near future so as to bring the advantages of the Measure to these poor people.

10.41 a.m.

Mr. J. Griffiths: We on this side are being subjected to one criticism almost every time we discuss this question of the Special Areas, and I am almost sure the Minister of Labour will make the same kind of criticism again. I want, therefore, to give our reply to it. This Clause makes provision for bringing in new areas, and we are charged from the other side with inconsistency when we say that the measures of the Government are trivial and at the same time request that other areas should be brought within the


provisions of the Bill. That is an expression of the terrible need of these areas, whose unemployment has been so intense and has been so badly helped, whose depression and poverty are so acute that they are in the position of beggars who are glad of even a penny. The result is that since the Special Areas Act of 1934 there have been repeated requests to the Government to extend these provisions so as to improve other areas. In our minds all the time is the belief that these areas are never going to recover their prosperity of their own volition unless they are strengthened from the outside, and the conviction that some day, sooner or later—and the sooner the better—we shall have a Government that will do the fundamental job so far as these areas are concerned.
There have been recommendations from the area that I represent and from other areas asking the Government to establish a new type of area, and I think the new name, the new description of such areas, may have some significance. So far as I can gather, there are certain areas which have made this request to the Ministry: "We do no want to be called a Special Area or a depressed area, because we believe that if we are scheduled as such, it may do damage to our prestige." I have heard that there are cities, or at least a city, in Wales and towns in Wales which are going to request to be certified. If they are certified and get assistance, whatever new industries come to Wales will go to that city and those areas, and Merthyr, Rhondda, and the other Special Areas will be robbed by the very provisions of this new Measure. I therefore want to press for a reply to the question why we have this new term of certified areas, which are not to be described as Special Areas or depressed areas, and whether such towns as I have in mind are going to be certified, because, if they are, I fear that the new industries will go there.
We have been here now for 12 hours, and I see that the morning shift is beginning to arrive. All that is provided for these new certified areas is that if they can provide, themselves, a site-company, the Government will assist them. I am thinking of some of the small towns and villages that I represent. Before we can get a brass farthing from the Government, we have to provide

a site-company and two-thirds of the capital required for that purpose. All that the Government will give is one-third. Do the Government suggest that these small towns and villages or groups of villages, dependent as they have been upon one or two main industries, and largely on one only, namely, the coal industry, with pits closed down, with no rich men or industrialists living there, and with almost all their population on unemployment benefit—do the Government suggest that in such areas we are going to get the money to provide two-thirds of the capital required for a site-company?
I think the worst thing that this House can do is to hold out hopes to the people in these areas that are going to be falsified. That is what we have been doing since 1934, passing one trivial Measure after another, each new discussion here creating fresh hopes in these Special Areas which have only been disappointed. Now we are holding out hopes to new areas, but I must say that I see no hope of a site-company being provided and of the money being raised to provide two-thirds of the cost of that company, unless —and here I want the Government to pay special attention to what I am saying. There are four of five pockets of unemployment in my division where the unemployment percentage is well over 50. They are dependent either on the coal pits, which are closed, or the tinplate works, which are being rationalised out of existence, and there is no hope of employment being provided unless there is assistance from outside. As I say, there are no rich people there, and the only hope of providing the money to establish a site-company in that area is for the local authority to do it.
Can the local authority, out of the rates which it can levy, provide the two-thirds of the money required to establish a site-company in such an area? Unless the local authority has the right to do it, who else can? If a site-company is not established, what will there be for these areas? There is nothing in this Bill. It seems to me to be vital that these areas should know who has the power. Has the local authority power to provide money for these site-companies? It will be outside the power of the Commissioner to provide money for them, and the Government will not give one-third until two-thirds have been found. Unless the


local authority have power to use public money to begin these site-companies, I see no hope for these areas.

10.52 a.m.

Mr. E. Brown: I do not intend to argue about the new advisory committee, since we have already debated that at length, and although we have since heard a very eloquent speech on that matter from the hon. Member for Bridgeton (Mr. Maxton), I do not consider it necessary that I should cover the ground again. Nor do I intend to say anything about the site-companies. The discussion boils down to this, that hon. Members wish to have whatever information I can give about the main conditions. Perhaps I can best reply by answering the questions put by the hon. Member for Barnstaple (Mr. Acland), the hon. Member for Seaham (Mr. Shinwell) and the hon. Member for Llanelly (Mr. J. Griffiths).
The hon. Member for Barnstaple put three questions. He asked, first, whether any particular area would be debarred because of size, and the answer is that it will not. The question to be settled ad hoc by the Committee is whether it is thought to be an area suitable for the facilities under this Clause. Secondly, asked what would be the rate of interest. The answer is that it will be determined by the Treasury on the advice of the Advisory Committee. With regard to his third question, whether, if A, B, C, and D took the initiative in setting up a site-company, it would be possible for the site-company also to be the manufacturing company. The answer is that it would not. The site-company would be one entity and the manufacturing company would be another, but I do not know of anything that would prevent any particular individual on the site-company from being connected with the manufacturing company. I think those three answers clear up points that have been raised by other hon. Members also.

Mr. Maxton: Does that mean that if A, B, C and D form a site-company either D, C, B or A may be on the manufacturing company?

Mr. Brown: There is nothing in the Bill to prevent an individual member of a site-company from being on the board of the manufacturing company. What we are anxious to do is to get local initiative, and to attract industries into the areas.

Mr. David Adams: May a local authority set up a site-company?

Mr. Brown: I have already answered that question. It may not, but the initiative would probably come from a local development council.

Mr. Adams: There might not be one.

Mr. Brown: There is no reason why one should not be formed.

Mr. J. Griffiths: If the local authority cannot provide out of the rates the money required for the site-company, and supposing that the local authority is represented on or is affiliated to the development council, may it make a contribution to the funds of the development council?

Mr. Brown: That depends entirely upon the Local Government Acts. The main issue turns on the conditions. This provision does not apply to an area where there is no possibility of the formation of a site-company, and it does not apply to any area unless it is clear that, without financial aid, there can be no recovery in that area. Hon. Members have asked why we have included these general words about "severe unemployment" and "general depression." The reason is that we were bound to have some standard to set before the advisory committee in order to direct attention where it was really wanted. As the Committee knows, the difficulty about extending the Special Areas was that there was such an overwhelming number of applications from cities, towns and areas of varying sizes that, if all the requests had been acceded to, we should have dissipated the efforts that we are making to get new industries to go to the Special Areas. Yet there might be left outside some areas, such as there are in parts of Yorkshire and Lancashire, to which obviously it would be proper to induce new industries to go.
An hon. Member has raised the question of Glasgow. I fully recognise the problems of that great city. It is a city which has a great deal of poverty, but it is also a city with very great resources and with a tremendous range of industries. But there cannot be any comparison between Glasgow and an area, such as the area near the constituency of the Hon. Member for Ince (Mr. G. Macdonald), the hon. Member for Wigan (Mr. Parkinson) or the hon. Member for Leigh (Mr. Tinker), where for a long period there has been great unemployment owing to a particular industry


having collapsed in that area. That is the broad line of demarcation. Therefore, we have tried to avoid any mathematical formula. Hon. Members who have had to deal with arrangements depending upon fixed figures know how difficult it is. What do we mean by the term "severe unemployment"? I refuse to be drawn into giving any fixed figure, any more than a fixed figure is given in the Bill, but I do not mind trying to give an indication of what we have in mind.

Mr. Shinwell: It is not a question of what the Minister thinks, for it depends on the recommendation of the Advisory Committee. How will the Advisory Committee make up its mind whether there is need to introduce new industrial enterprises into a particular area on the strength of the phrase "severe unemployment"?

Mr. Brown: Severe unemployment would be one of the elements of the problem that would have to be considered: If we said that an area was not an area to be assisted unless it had unemployment of not less than 20 per cent. over five years, there might be particular cases where other factors would be involved; such as general depression which ought to be considered even though the mathematical formula was not satisfied. It must be remembered that in all these things there is nothing static. Conditions change from time to time. The effects of rationalisation, the extent to which industrial expansion is fully employed, the general level of unemployment, the existence of large blocks of unemployment in particular areas—these are some of the factors which have to be taken into account. There may be others which arise out of the peculiarities of a particular industry. But whatever they are, they have to be considered and we have laid down this proposal here in general terms, so that the advisory committee, in the light of their commonsense and of the policy declared in the Clause, may be able to make recommendations as to whether or not an area fulfills the required conditions.
The hon. Member for Llanelly (Mr. J. Griffiths) put a question to me and I was careful not to give him a mathematical answer. He also interrupted the Chancellor of the Exchequer on the same point, but my right hon. Friend returned

exactly the same kind of answer for exactly the same reason. It is not that there is any desire to avoid giving answers to questions which can be answered, but because we do not wish to prejudge these matters by laying down arbitrary figures now, as to the cases in which it might be suitable to try to induce industries to come into these areas. In answer to the major point raised by the hon. Member for Seaham (Mr. Shinwell), this Bill does represent a determined attempt to induce industries to come into the Special Areas, and I am sure that it will be a successful attempt. I believe there are areas in which there is sufficient local initiative to induce industries to come in and to diversify their industrial and economic life and that full advantage will be taken of these facilities. This Clause of the Bill will be effective for the good of areas outside the Special Areas.

11.4 a.m.

Mr. Ellis Smith: Sub-section (3) of this Clause states that any sums required for the provision of financial assistance under it, are to be paid out of moneys provided by Parliament. We hear from time to time criticisms levelled against the practice of outside bodies usurping the functions of Parliament. I wish to know, as we have had reports prepared by special Commissioners dealing with the Special Areas in the past, whether under this Bill we shall have reports prepared for the certified areas so that the House can examine what is taking place in those areas from time to time.

Mr. Brown: It will, of course, be part of my normal responsibility to give the House full information on these matters.

Mr. Smith: The Clause also states that if the Minister, upon representations made to him, is satisfied as respects any area not being, or forming part of a Special Area, of certain conditions, he may direct that the Clause shall apply to that area. Representations have been made to me in regard to an area which is seriously affected by economic conditions. Chambers of commerce, trades councils, urban district councils and other bodies in that area have jointly done which they could to revive industry in it, but up to now with very little success. I refer to the North Staffordshire area. There are urban and rural districts there with between 30 per cent. and 50 per cent. of unem-


ployment. There is an ideal railway system, water supply and coal supply and an ample supply of limestone. In the third Report of the Commissioner for Special Areas we find this:
Production of Calcium Carbide.
Further investigation of this problem may be required. Preliminary investigations made for me by a competent firm of engineers indicate that the production of calcium carbide using electricity generated from steam power is now a commercial possibility.
I understand that practically all the calcium carbide consumed in this country is imported, and that competent engineers have stated that it could be manufactured here at £7 per ton cheaper than the cost of its importation.

The Deputy-Chairman: I do not see how this Clause affects the hon. Member's point.

Mr. Smith: I am referring to the words "If the Minister upon representations made to him is satisfied as respects any area." If there is unemployment in the area, representations may be made to the Minister asking for financial assistance.

The Deputy-Chairman: I do not think the hon. Member is right. What they can do, is to make representations to the Minister about the formation of a site company, but I do not think that would affect the problem referred to by the hon. Member one way or the other.

Mr. Smith: They might start a company to manufacture calcium carbide.

The time has arrived when this question ought to be faced by us. We are suspicious that there is some combine responsible for preventing the manufacture of calcium carbide in this country. In the report of the Commissioner attention is drawn to this:
Mechanisation and rationalisation are constantly reducing the number of men required to raise a given quantity of coal.

The Deputy-Chairman: We cannot go into that subject on the Question, "That the Clause stand part of the Bill." This is solely concerned with the question of whether site-companies should be provided, either within or without the Special Areas.

Mr. Smith: I shall respect your Ruling, Captain Bourne. The point I wished to make was that the time had arrived when a company should be set up for the manufacture of calcium carbide. We are suspicious that a monopoly is preventing it being manufactured in this country and it could be manufactured in these areas.

Several hon. Members: Several hon. Members rose—

Captain Margesson: Captain Margesson rose in his place, and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The Committee divided: Ayes, 135; Noes, 63.

Division No. 159.]
AYES.
[11.10 a.m.


Adams, S. V. T. (Leeds, W.)
Cobb, Captain E. C. (Preston)
Harvey, Sir G.


Agnew, Lieut.-Comdr. P. G.
Colville, Lt.-Col. Rt. Hon. D. J.
Haslam, H. C. (Horncastle)


Albery, Sir Irving
Cooke, J. D. (Hammersmith, S.)
Haslam, Sir J. (Bolton)


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs)
Heilgers, Captain F. F. A.


Balniel, Lord
Cranborne, Viscount
Herbert, A. P. (Oxford U.)


Barclay-Harvey, Sir C. M.
Crooke, J. S.
Hills, Major Rt. Hon. J. W. (Ripon)


Barrie, Sir C. C.
Crookshank, Capt. H. F. C.
Holmes, J. S.


Baxter, A, Beverley
Crowder, J. F. E.
Hope, Captain Hon. A. O. J.


Beaumont, Hon. R. E. B. (Portsm'h)
Davies, C. (Montgomery)
Hopkinson, A.


Beit, Sir A. L.
Davies, Major Sir G. F. (Yeovil)
Hore-Belisha, Rt. Hon. L.


Blinded, Sir J.
Dower, Capt. A. V. G.
Horsbrugh, Florence


Boothby, R. J. G.
Dugdale, Major T. L.
Hudson, R. S. (Southport)


Bowater, Col. Sir T. Vansittart
Duncan, J. A. L.
Hurd, Sir P. A.


Bower, Comdr. R. T.
Eckersley, P. T.
Inskip, Rt. Hon. Sir T. W. H.


Bowyer, Capt. Sir G. E. W.
Elliot, Rt. Hon. W. E.
James, Wing-Commander A. W. H.


Braithwaite, Major A. N.
Elmley, Viscount
Jarvis, Sir J. J.


Brooklebank, C. E. R.
Emery, J. F.
Joel, D. J. B.


Brown, Rt. Hon. E. (Leith)
Emrys-Evans, P. V.
Keeling, E. H.


Bull, B. B.
Evans, Capt. A. (Cardiff, S.)
Kerr, Colonel C. I. (Montrose)


Bullock, Capt. M.
Findlay, Sir E.
Keyes, Admiral of the Fleet Sir R.


Cartland, J. R. H.
Fox, Sir G. W. G.
Lamb, Sir J. Q.


Carver, Major W. H.
Furness, S. N.
Leighton, Major B. E. p.


Cary, R. A.
Fyfe, D. P. M
Lloyd, G. W.


Castlereagh, Viscount
Gibson, C. G. (Pudsey and Otley)
Loftus, P. C.


Cazalet, Thelma (Islington, E.)
Grimston, R. V.
Lyons, A. M.


Channon, H.
Guinness, T. L. E. B.
MacAndrew, Colonel Sir C. G.


Chorlton, A. E. L.
Gunston, Capt. D. W.
McCorquodale, M. S.


Clydesdale, Marquess of
Hamilton, Sir G. C.
McKie, J. H.




Makins, Brig.-Gen. E.
Raikes, H. V. A. M.
Somervell. Sir D. B. (Crewe)


Manningham-Buller, Sir M
Ramsay, Captain A. H. M.
Southby, Commander A. R. J.


Margesson, Capt. Rt. Hon H. D. R.
Ramsbotham, H.
Spears, Brigadier-General E. L.


Maxwell, Hon. S. A.
Rankin, Sir R.
Sueter, Rear-Admiral Sir M. F.


Mayhew, Lt. Col. J.
Rathbone, J. R. (Bodmin)
Tate, Mavis C.


Mellor, Sir J. S. P. (Tamworth)
Rickards, G. W. (Skipton)
Touche, G. C.


Mills, Major J. D. (New Forest)
Robinson, J. R. (Blackpool)
Tree, A. R. L. F.


Moore, Lieut.-Col. T. C. R.
Ropner, Colonel L.
Tryon, Major Rt. Hon. G. C.


Moreing, A. C.
Ross, Major Sir R. D. (Londonderry)
Wakefield, W. W.


Palmer, G. E. H.
Russell, R. J. (Eddisbury)
Ward, Lieut.-Col. Sir A. L. (Hull)


Patrick, C. M.
Salmon, Sir I.
Warrender, Sir V.


Penny, Sir G.
Savery, Sir Servington
Watt, G. S. H.


Percy, Rt. Hon. Lord E.
Selley, H. R.
Williams, C. (Torquay)


Perkins, W. R. D.
Shakespeare, G. H.
Williams, H. G. (Croydon, S.)


Peters, Dr. S. J.
Shaw, Major P. S. (Wavertree)
Withers, Sir J. J.


Plugge, Capt. L. F.
Simon, Rt. Hon. Sir J. A.



Ponsonby, Col. C. E.
Smith, L. W. (Hallam)
TELLERS FOR THE AYES.—


Pownall, Lt.-Col. Sir Assheton
Smith, Sir R. W. (Aberdeen)
Mr. James Stuart and Lieut.- Colonel Llewellin.




NOES.


Adams, D. (Consett)
Hall, J. H. (Whitechapel)
Pritt, D. N.


Adamson, W. M.
Harris, Sir P. A.
Quibell, D. J. K.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Hayday, A.
Ritson, J.


Altlee, Rt. Hon. C. R.
Henderson, J. (Ardwick)
Rowson, G.


Barr, J.
Hopkin, D.
Seely, Sir H. M.


Batey, J.
Jagger, J.
Shinwell, E.


Burke, W. A.
Jenkins, A. (Pontypool)
Smith, Ben (Rotherhithe)


Davidson, J. J. (Maryhill)
Jenkins, Sir W. (Neath)
Smith, E. (Stoke)


Davies, R. J. (Westhoughton)
Jones, A. C. (Shipley)
Smith, T. (Normanton)


Day, H.
Kelly, W. T.
Sorensen, R. W.


Dobbie, W.
Kennedy, Rt. Hon. T.
Stephen, C.


Dunn, E. (Rother Valley)
Kirby, B. V.
Strauss, G. R. (Lambeth, N.)


Ede, J. C.
Lee, F.
Taylor, R. J. (Morpeth)


Edwards, Sir C. (Bedwellty)
Leslie, J. R.
Thorne, W.


Foot, D. M.
Lunn, W.
Tinker, J. J.


Frankel, D.
Macdonald, G. (Ince)
Watkins, F. C.


Gardner, B. W.
McEntee, V. La T.
White, H. Graham


George, Megan Lloyd (Anglesey)
MacMillan, M. (Western Isles)
Windsor, W. (Hull, C.)


Griffith, F. Kingsley (M'ddl'sbro, W.)
Maxton, J.
Woods, G. S. (Finsbury)


Griffiths, G. A. (Hemsworth)
Messer, F.



Griffiths, J. (Llanelly)
Parkinson, J. A.
TELLERS FOR THE NOES.—


Groves, T. E.
Potts, J.
Mr. Whiteley and Mr. Mathers.

Question put accordingly, "That the Clause stand part of the Bill".

The Committee divided: Ayes, 145; Noes, 59.

Division No. 160.]
AYES.
11.17 a.m.


Adams, S. V. T. (Leeds, W.)
Crookshank, Capt. H. F. C.
Holmes, J. S.


Agnew, Lieut.-Comdr. P. G.
Crowder, J. F. E.
Hope, Captain Hon. A. O. J.


Albery, Sir Irving
Davies, C. (Montgomery)
Hopkinson, A.


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Davies, Major Sir G. F. (Yeovil)
Hore-Belisha, Rt. Hon. L.


Balniel, Lord
Dower, Capt. A. V. G.
Horsbrugh, Florence


Barclay-Harvey, Sir C. M.
Dugdate, Major T. L.
Hudson, R. S. (Southport)


Barrie, Sir G. G.
Duncan, J. A. L.
Hurd, Sir P. A.


Baxter, A. Beverley
Eckersley, P. T.
Inskip, Rt. Hon. Sir T. W. H.


Beaumont, Hon. R. E. B. (Portsm'h)
Edmondson, Major Sir J.
James, Wing-Commander A. W. H.


Beit, Sir A. L.
Elliot, Rt. Hon. W E
Jarvis, Sir J. J.


Blindell, Sir J.
Elmley, Viscount
Joel, D. J. B.


Boothby, R. J. G.
Emery, J. F.
Keeling, E. H.


Bowater, Col. Sir T. Vansittart
Emrys-Evans, P. V.
Kerr, Colonel C. I. (Montrose)


Bower, Comdr. R. T.
Evans, Capt. A. (Cardiff, S.)
Keyes, Admiral of the Fleet Sir R.


Bowyer, Capt. Sir G. E. W.
Findlay, Sir E.
Lamb, Sir J. Q.


Braithwaite, Major A. N.
Foot, D. M.
Leighton, Major B. E. P.


Brocklebank, C. E. R.
Fox, Sir G. W. G.
Lloyd, G. W.


Brown, Rt. Hon. E. (Leith)
Furness, S. N.
Loftus, P. C.


Bull, B. B.
Fyfe, D. P. M.
Lyons, A. M.


Bullock, Capt. M.
George, Megan Lloyd (Anglesey)
MacAndrew, Colonel Sir C. G.


Cartland, J. R. H.
Gibson, C. G. (Pudsey and Otley)
McCorquodale, M. S.


Carver, Major W. H.
Grant-Ferris, R.
McKie, J. H.


Cary, R. A.
Griffith, F. Kingsley (M'ddl'sbro, W.)
Makins, Brig.-Gen. E.


Castlereagh, Viscount
Grimston, R. V.
Manningham-Buller, Sir M.


Cazalet, Thelma (Islington, E.)
Guinness, T. L. E. B.
Margesson, Capt. Rt. Hon. H. D. R.


Channon, H.
Gunston, Capt. D. W.
Maxwell, Hon. S. A.


Chorlton, A. E. L.
Hamilton, Sir G. C.
Mayhew, Lt.-Col. d.


Clydesdale, Marquess of
Harris, Sir P. A.
Mellor, Sir J. S. P. (Tamworth)


Cobb, Captain E. C. (Preston)
Harvey, Sir G.
Mills, Major J. D. (New Forest)


Colville, Lt.-Col. Rt. Hon. D. J.
Haslam, H. C. (Horncastle)
Moore, Lieut.-Col. T. C. R.


Cooke, J. D. (Hammersmith, S.)
Haslam, Sir J. (Bolton)
Moreing, A. C.


Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs)
Heilgers, Captain F. F. A.
Palmer, G. E. H.


Cranborne, Viscount
Herbert, A. P. (Oxford U.)
Patrick, C. M.


Crooke, J. S.
Hills, Major Rt. Hon. J. W. (Ripon)
Penny, Sir G.




Percy, Rt. Hon. Lord E.
Salmon, Sir I.
Touche, G. C.


Parking, W. R. D.
Savery, Sir Servington
Tree, A. R. L. F.


Peters, Dr. S. J.
Seely, Sir H. M.
Tryon, Major Rt. Hon. G. C.


Plugge, Capt. L. F.
Selley, H. R.
Wakefield, W. W.


Ponsonby, Col. C. E.
Shakespeare, G. H.
Ward, Lieut.-Col. Sir A. L. (Hull)


Pownall, Lt.-Col. Sir Assheton
Shaw, Major P. S. (Wavertree)
Warrender, Sir V.


Raikes, H. V. A. M.
Simon, Rt. Hon. Sir J. A.
Watt, G. S. H.


Ramsay, Captain A. H. M.
Smith, L. W. (Hallam)
White, H. Graham


Ramsbotham, H.
Smith, Sir R. W. (Aberdeen)
Williams, C. (Torquay)


Rankin, Sir R.
Somervell, Sir D. B. (Crewe)
Williams, H. G. (Croydon, S.)


Rathbone, J. R. (Bodmin)
Somerville, A. A. (Windsor)
Withers, Sir J. J.


Rickards, G. W. (Skipton)
Southby, Commander A. R. J.



Robinson, J. R. (Blackpool)
Spears, Brigadier-General E. L.
TELLERS FOR THE AYES.—


Ropner, Colonel L.
Sueter, Rear-Admiral Sir M. F.
Mr. James Stuart and Lieut.- Colonel Llewellin.


Ross, Major Sir R. O. (Londonderry)
Tate, Mavis C.



Russell, R. J. (Eddisbury)
Thomas, J. P. L.





NOES.


Adams, D. (Consett)
Hopkin, D.
Quibell, D. J. K.


Adamson, W. M.
Jagger, J.
Ritson, J.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Jenkins, A. (Pontypool)
Rowson, G.


Attlee, Rt. Hon. C. R.
Jenkins, Sir W. (Neath)
Shinwell, E.


Barr, J.
Jones, A. C. (Shipley)
Smith, Ben (Rotherhithe)


Batey, J.
Kelly, W. T.
Smith, E. (Stoke)


Burke, W. A.
Kennedy, Rt. Hon. T.
Smith, T. (Normanton)


Davidson, J. J. (Maryhill)
Kirby, B. V.
Sorensen, R. W.


Davies, R. J. (Westhoughton)
Lawson, J. J.
Stephen, C.


Day, H.
Lee, F.
Strauss, G. R. (Lambeth, N.)


Dobbie, W.
Leslie, J. R.
Taylor, R. J. (Morpeth)


Dunn, E. (Rother Valley)
Lunn, W.
Thorne, W.


Ede, J. C.
Macdonald, G. (Ince)
Tinker, J. J.


Edwards, Sir C. (Bedwellty)
McEntee, V. La T.
Viant, S. P.


Frankel, D.
Macmillan, H. (Stockton-on-Tees)
Watkins, F. C.


Gardner, B. W.
Mathers, G.
Windsor, W. (Hull, C.)


Griffiths, G. A. (Hemsworth)
Maxton, J.
Woods, G. S. (Finsbury)


Griffiths, J. (Llanelly)
Messer, F.



Hall, J. H. (Whitechapel)
Parkinson, J. A.
TELLERS FOR THE NOES.—


Hayday, A.
Potts, J.
Mr. Whiteley and Mr. Groves.


Henderson, J. (Ardwick)
Pritt, D. N.



Question, "That the Clause stand part of the Bill," put, and agreed to.

Clause 6 ordered to stand part of the Bill.

CLAUSE 7.—(Interpretation.)

11.25 a.m.

Mr. Lawson: I beg to move, in page 4, line 29, to leave out from "1928" to the end of the paragraph.
I only move this Amendment for the purpose of getting an explanation from the Minister. I should like to ask the Minister why it is that an industrial undertaking is defined as not including any factory in which less than 10 persons are employed.

Mr. E. Brown: It does not follow, of course, that a factory employing, say, 11 men would be qualified, but the issue is whether a factory is likely to employ 10 or more persons. Supposing that there were a reasonable prospect of its employing 50, 60, or 100 later on, there is no reason why it should not qualify, but obviously it was not the policy to provide financial facilities under this Bill or the Special Areas Reconstruction Act to encourage the coming of factories to

areas if they were never likely to employ more than a small number of persons. The one thing that we do not want to do is to encourage false hopes.

Mr. Lawson: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

11.27 a.m.

Mr. Barr: I promise not to detain the Committee for more than a few moments: [HON MEMBERS: "Why not"?] It is very easy for those who have only come here this morning to say that to those who have been here doing their duty all through the night. I should like some guidance and, if possible, an answer from the Minister. It will be noted that under the definition of "field drainage" in Clause 7 it includes the drainage of moor land. That refers to a provision in Subsection (2) of Clause 4, and the question I want to ask the Minister is whether the term "field drainage" would include,


under this Bill, the de-watering of mines. In the Final Report of the Commissioner for the Special Areas in Scotland there is included, among the schemes for which financial assistance from the Special Areas Fund has been provided, the de-watering of mines. This is a vital matter to my constituency. At the present moment, in spite of all that is being said about prosperity, there are still about 8,000 persons unemployed in my constituency—4,500 in Coatbridge and 3,500 in Airdrie, and, of the Aidrie unemployed, almost 1,000 are accounted for by the abandonment of mines due to their being water-logged and for other reasons. If the de-watering of these mines could be successfully carried out, it would make a very substantial inroad on the unemployment figures in my constituency.

Mr. E. Brown: The hon. Member is, of course, raising very big issues, and I regret that I cannot give him any hope in that direction. Field drainage does not include the de-watering of mines.

Mr. Barr: I would like to emphasise the point that already a survey for the de-watering of mines is included among the schemes for which financial assistance to the Special Areas had been provided. Will not that be covered by the definition in the Clause?

Mr. Brown: No. The hon. Member is trying to read too much into the proposed powers of the Commissioners.

Mr. T. Smith: I should like to call attention to the language used in this interpretation.
Factory means premises suitable for occupation is a factory or workshop.
Should it not read "as a factory or workshop."

Mr. Brown: It is a misprint. I will see that it is put right in another place.

Clause 8 ordered to stand part of the Bill.

CLAUSE 9.—(Duration of Act.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

11.32 a.m.

Mr. Batey: I have an Amendment down to leave out "thirty-nine" and to insert "thirty-eight." I want to ask why it is not in Order, because the Chairman said that both that and the new Clause following in my name were in Order. One is rather surprised that you, Sir, have made up your mind not to call them. I want to protest as strongly as I possibly can. It is the least I can do.

The Deputy-Chairman: Under the Standing Orders the question which Amendments are selected is vested in me and I am under no obligation to make any explanation. It has been the invariable practice of my predecessors and I do not propose to depart from it.

Mr. Batey: Surely you pay some respect to the Chairman of Ways and Means when he makes a statement for the guidance of the Committee.

Mr. Shinwell: We are all very anxious to respect your ruling, Sir, but I am bound to say that the opinion that you have just expressed with regard to my hon. Friend's Amendment was not expressed by the Chairman of Ways and Means on Monday. I asked him to indicate the specific Amendments that he proposed to call and, in his reply to me, he did not specifically exclude my hon. Friend's Amendment. I cannot understand why a change has taken place in the last few days.

The Deputy-Chairman: The Chairman always reserves to himself the right to select Amendments in accordance with the progress of the Debate. On this occasion both the Chairman and I decided that neither of these Amendments should be selected.

Clause 10 ordered to stand part of the Bill.

Bill reported, without Amendment; to be read the Third time upon Monday next.

Mr. Stephen: On a point of Order. I understand that the Deputy-Chairman of Ways and Means has reported something to you. In view of what happened during the night I think it would make for order in the House if he would intimate it sufficiently loudly for Members of the House to hear.

Mr. Speaker: I see no reason for any change from the ordinary practice.

ADJOURNMENT.

Resolved, "That this House, at its rising this day, do adjourn till Monday next."—[Captain Margesson.]

The remaining Orders were read, and postponed.

It being after Half-past Eleven of the Clock upon Thursday evening, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order till Monday next, pursuant to the Resolution of the House this day.

Adjourned at Twenty-one Minutes before Twelve o'Clock noon on Friday, 23rd April, until Monday, 26th April.